Runpod Hits $120M ARR: How a Reddit Post Launched a Developer-Focused AI Cloud Startup
AI cloud startup Runpod, founded by Zhen Lu and Pardeep Singh, has reached an impressive $120 million annual revenue run rate (ARR) just four years after launching. The platform, designed to host AI applications, has grown from a small experiment in their New Jersey basements to a global service spanning 31 regions and serving 500,000 developers, from solo coders to Fortune 500 companies.
The startup’s journey began in late 2021 when Lu and Singh, former Comcast developers, realized their Ethereum mining hobby wasn’t sustainable. With a combined $50,000 investment from their wives’ blessing, they repurposed their mining rigs for AI workloads, noticing how cumbersome the existing GPU software stack was. “We felt that the actual experience of developing software on top of GPUs was just hot garbage,” Lu explained. This frustration sparked the creation of Runpod, a platform emphasizing speed, easy hardware configuration, and developer-friendly tools.
In early 2022, the founders launched Runpod by posting on AI-focused subreddits, offering free access in exchange for feedback. The approach worked—beta users became paying customers, and within nine months, Runpod hit $1 million in revenue. Rather than immediately raising venture capital, they bootstrapped the business, forming revenue-share partnerships with data centers to expand capacity while keeping operations financially self-sustaining.
The company’s big break came when VC Radhika Malik discovered them on Reddit, leading to a $20 million seed round co-led by Dell Technologies Capital and Intel Capital. Hugging Face co-founder Julien Chaumond also invested after discovering Runpod through its support chat. By May 2024, Runpod had 100,000 developers on board, positioning itself just ahead of the AI app boom sparked by tools like ChatGPT.
Today, Runpod serves high-profile clients such as Replit, OpenAI, Perplexity, Wix, and Zillow, standing out in a competitive field that includes AWS, Microsoft, Google, and specialized cloud providers like CoreWeave. The founders envision a future where developers increasingly operate AI agents, aiming to make Runpod the platform this next generation of software creators grows up on. Lu says, “Our goal is to be what this next generation of software developers grows up on.”
source: techcrunch