Surge AI Eyes Up to $1 Billion Capital Raise Amid Growth and Competition with Scale AI

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Surge AI, a fast-growing data-labeling company competing directly with Scale AI, is reportedly preparing to raise as much as $1 billion in its first-ever capital fundraising, according to sources cited by Reuters. Founded by former Google and Meta engineer Edwin Chen, Surge AI aims for a valuation exceeding $15 billion, although talks remain in the early stages and the final amount could be higher. The planned funding round would include both primary capital to fuel growth and secondary capital to provide liquidity for employees.

Surge AI has achieved profitability and has been bootstrapped since its 2020 founding. It generated over $1 billion in revenue last year, surpassing Scale AI’s $870 million revenue for the same period. By comparison, Scale AI was last valued at $14 billion in a funding round last year, and more recently at nearly $29 billion following Meta’s strategic investment, which included hiring Scale’s CEO Alexandr Wang to lead Meta’s Superintelligence Labs.

The surge in interest for Surge AI coincides with a shift among some major AI customers, such as Google and OpenAI, who are reportedly moving away from Scale AI due to concerns about sharing sensitive research priorities with Meta, Scale’s largest investor. Despite this, Scale AI maintains its business remains strong and reassures clients about data protection.

Surge AI has grown quietly but rapidly, becoming a major player in the data labeling space, distinguished by its use of a network of highly skilled contractors rather than large pools of low-cost labor. Its premium services cater to leading AI labs including Google, OpenAI, and Anthropic.

As reinforcement learning from human feedback (RLHF) becomes critical for training advanced AI, the need for precise, nuanced data labeling has soared, benefiting companies like Surge AI. However, some investors remain cautious about the sector due to its traditionally low margins and reliance on human labor, which could face automation pressures as AI technologies advance.

Figma Reports Strong Revenue and Profit Growth Ahead of NYSE IPO

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Figma, the cloud-based design platform, revealed robust revenue and profit growth in its filing for an initial public offering (IPO) on the New York Stock Exchange, setting the stage for one of 2025’s most anticipated listings. This move comes more than a year after Adobe’s planned $20 billion acquisition of Figma was called off due to regulatory hurdles in Europe and the UK.

For the first quarter ending March 31, 2025, Figma reported revenue of $228.2 million, a significant increase from $156.2 million in the same period last year. Its net income also tripled to $44.9 million. The company’s valuation had reached $12.5 billion last year during a tender offer allowing early investors and employees to cash out partially.

Figma’s IPO had been expected after Adobe’s acquisition was blocked and mutually shelved in December 2023. CEO and co-founder Dylan Field emphasized the company’s commitment to AI development, acknowledging that investing heavily in this technology could affect near-term efficiency but is vital for long-term growth. Field indicated the company will take “big swings” on platform investments and potential mergers and acquisitions, even if such moves may not seem immediately rational.

The company plans to use a portion of the IPO proceeds to pay down borrowings under its revolving credit facility, which it has used to manage upcoming tax payments. Major investment banks Morgan Stanley, Goldman Sachs, Allen & Co, and J.P. Morgan are leading the underwriting of the offering. Figma’s shares are expected to trade under the ticker symbol “FIG.”

French and Swiss Business Software Firms Merge to Form $1.1 Billion Unicorn

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French business software provider LumApps and Swiss counterpart Beekeeper announced a merger on Wednesday that will create a new unicorn valued at approximately $1.1 billion. The deal, expected to close this month, is supported by British private equity firm Bridgepoint, which was a major shareholder in LumApps and will hold a majority stake in the combined company.

The new firm will be headquartered in Lyon, France — home to LumApps — and led by LumApps CEO Sebastien Ricard. Together, the company will employ around 600 people worldwide.

Beekeeper CEO Cristian Grossmann said that an IPO or trade sale could be considered midterm options, with the U.S. and Europe as potential venues given the company’s core markets.

LumApps develops software primarily used to manage corporate intranets and aims to enhance or replace products like Microsoft’s SharePoint. Their client base includes prominent companies such as Airbus and luxury goods giant LVMH.

Meanwhile, Beekeeper offers an app designed to connect frontline workers with the wider company, serving clients like Swiss retailer Coop and Heathrow Airport. Founded by ETH Zurich graduates, Beekeeper plans to break even this year.

Within six months, the merged company intends to launch a unified platform. Current annual revenue is around $150 million and is projected to double to $300 million by 2030. LumApps is already profitable, and the combined business is expected to be profitable from day one, according to LumApps CTO Elie Melois.