A South Jersey startup founded by former Comcast Corp. software engineers raised $20 million in seed funding led by the venture capital arms of tech giants Intel and Dell Technologies.
Mt. Laurel-based RunPod, a cloud-based service for software developers to create artificial intelligence applications, has secured backing from Intel Capital and Dell Technologies Capital just over two years after it was founded in 2022. The company raised the seed round to continue its rapid growth.
RunPod cofounder and CEO Zhen Lu said he expects the company's headcount to balloon from about 10 at the end of 2023 to more than 60 at the end of this year. Revenue increased 10 times from the company's first year in business to its second, according to Lu.
Growing teams quickly is something Lu and Pardeep Singh, RunPod's cofounder and chief technology officer, have done before. The duo built their software team out at Comcast from eight when Lu joined the company in 2017 to a peak of close to 100 people.
"We learned two things. Number one, we work really well together, we complement each other really well and probably should start a company at some point," said Lu, who received his doctorate in chemistry from Temple University. "Number two, that we both had aspirations and thought, we're building some really cool stuff on the cloud, but wouldn't [it be] really cool to build the cloud."
Singh and Lu began writing software in their free time and the earliest versions of RunPod began to form. They launched a free version of it on Reddit in March 2022, marketing it as a platform where developers could create applications in the AI space. They quickly found it was a service that could generate revenue, and they eventually left their day jobs at Comcast when the platform grew to demand their full attention.
Lu left Comcast (NASDAQ: CMCSA) in late 2022 and Singh in early 2023. RunPod had been bootstrapped prior to the seed round, and Lu said raising money was more of a luxury than a necessity.
"We raised money not because we actually needed to raise money. We raised money because we thought it was the strategic thing to do with the current landscape of venture capital, the fact that we really did want to take it to the next level," Lu said. "We could have continued to grow at a very, very healthy pace, without money. ... It was almost as much about the network and the trust, more than just the cold hard cash."
Lu and Singh went through the fundraising process beginning in late 2023. Lu said they spoke with a number of Dell Technologies Capital and Intel Capital portfolio companies before securing the investment and found a "willingness to go to bat" from both investors.
RunPod will use the $20 million primarily to grow headcount and continue to scale the platform by building out more products based on feedback from users. Lu said the company will primarily look to hire engineers with an eye toward more senior-level additions. It will help RunPod get to a point where it's a "holistic solution" for software developers looking to build AI applications.
"I feel like the AI application is going to be the most important thing in the next decade of computing," Lu said.
He hopes that RunPod is "one of the forerunners" in the burgeoning world of artificial intelligence and machine learning.
"Our long-term goal is really to be one of the leaders in defining what this next generation of computing looks like," Lu said.
