Turing Raises $111M at $2.2B Valuation

Turing Secures $111 Million to Fuel AI Development and Coding Services

In the competitive landscape of artificial intelligence, where companies are striving for enhanced accuracy in large language models (LLMs) and related applications, Turing, a key partner in this advancement, has announced a substantial funding injection. The startup has successfully raised a $111 million Series E round, effectively doubling its valuation to $2.2 billion.

Rapid Growth and Financial Performance

Currently, Turing is experiencing significant growth, generating approximately $300 million in ARR (annualized revenue run rate). This figure represents an increase from the $167 million ARR recorded when the latest funding round was finalized. According to CEO Jonathan Siddharth, the company has maintained profitability for roughly a year and intends to utilize the new capital to expand its customer base and diversify its applications.

Turing collaborates with a network of approximately 4 million coders globally. However, the company’s internal employee count remains considerably smaller, numbering in the hundreds, as noted by one of its investors.

Investment Details

The funding round was spearheaded by Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, with additional participation from WestBridge Capital, Sozo Ventures, UpHonest Capital, AltaIR Capital, Amino Capital, Plug and Play, MVP Ventures, Fortius Ventures, Gaingels, and Mastodon Capital Management. To date, Palo Alto-based Turing has secured a total of $225 million in funding.

From HR Tech to AI Powerhouse

Turing’s current prominence as a vital partner to AI companies represents an evolution from its initial business model. The company originally functioned as an HR technology startup.

Early Focus on Remote Coding Talent

Its initial offering was a platform designed for vetting and recruiting remote coders. This service gained traction during the COVID-19 pandemic, as organizations sought improved tools for managing and sourcing remote teams. The success of this platform propelled the company to “unicorn” status, attracting both customers and investors.

“My initial meeting with them in 2018 was truly eye-opening,” stated Sumir Chadha, a co-founder and managing partner at WestBridge. He highlighted how Siddharth fundamentally altered the traditional management consultancy and offshoring approaches. “The conventional methods are unnecessary; even an HR department can be eliminated. Turing and its network of remote engineers provide a complete solution.”

A Shift in Focus Triggered by OpenAI

This initial success ultimately led to a new opportunity. As reported by Semafor last year, Siddharth received an unexpected invitation to OpenAI in 2022. He anticipated a discussion regarding engineer recruitment for his own startup, but instead, OpenAI presented a collaborative proposition.

OpenAI researchers had determined that incorporating code into training datasets enhanced the model’s reasoning abilities. Consequently, they sought Turing’s assistance in generating this code. Siddharth agreed, initiating a new strategic direction for the startup. Turing now provides similar services to several foundational AI companies, as well as those developing applications built upon these LLMs.

The Importance of Software Engineering Tokens

“The emergence of ChatGPT was unforeseen,” Siddharth remarked this week. He also expressed surprise at the critical role software engineering tokens play in enabling LLMs to learn, reason, and code effectively. “The significance of these tokens in teaching an LLM to think and reason was not widely understood.”

However, this development has not necessitated a complete business overhaul. Siddharth clarified that Turing continues to generate substantial revenue from its original coding talent sourcing business, although specific figures were not disclosed.

Future Expansion and Strategic Divisions

“All business segments are experiencing growth,” he affirmed. “We are accelerating investment in R&D, sales, and marketing across all three areas, and are currently in a phase of rapid expansion.”

The primary focus moving forward will be to further strengthen its position as a coding provider for the development of future LLMs – a division optimistically named “Turing AGI Advancement” – and to expand its work on applications and services leveraging these LLMs, operating under the banner of “Turing Intelligence.”

This article has been updated to reflect the most recent ARR figures.