A two-year-old South Jersey startup has been named one of 25 companies in the U.S. that Forbes predicts is most likely to reach a $1 billion valuation.
Runpod, based in Mount Laurel and founded by Comcast Corp. alums, is a cloud-based service for software developers to create artificial intelligence applications. In a list dominated by artificial intelligence startups — many of them from California — Runpod is one of the few that hails from the East Coast.
This is the 10th year Forbes has released the "Next Billion-Dollar Startups" list in collaboration with TrueBridge Capital Partners, and it's been a solid early indicator of startup success in an unpredictable venture capital world. Of the 225 startups that have made an appearance over the last decade, 131 — or 58% — have hit the $1 billion valuation, making them startup unicorns.
Startups on previous lists have included DoorDash, Figma and Duolingo.
To be eligible to make the Forbes list, companies must be based in the U.S. and be private and venture-backed. Important datapoints like headcount, revenue, valuation and capital raised are analyzed, along with qualitative measures.
In addition to Runpod, two of the startups on this year's list — Fairfield, California-based Promise and New York-based Clay — count Philadelphia investor Josh Kopelman's First Round Capital as a lead backer.
Forbes describes Runpod as doing "for artificial intelligence what the big cloud providers such as Amazon did for internet applications" by giving companies the ability to use its graphics processing units rather than purchase their own, an essential computing infrastructure for AI. Runpod calls itself as the "first cloud provider for AI applications" and "the launchpad that empowers developers to deploy custom full-stack AI applications."
Runpod is still a young startup, founded by Zhen Lu and Pardeep Singh in 2022, both of whom shortly thereafter left their software engineering roles at Comcast (NASDAQ: CMCSA) to run the startup full time. The company raised a $20 million seed round in May from the venture capital arms of tech giants Intel and Dell.
According to Forbes, Runpod is profitable and pulled in estimated revenue in 2023 of $15 million.
Lu, who received his doctorate in chemistry from Temple University and was a faculty member at the University of Pittsburgh, told the Business Journal in June that revenue increased 10-fold in the company's second year of business.
Runpod's headcount is set to grow quickly as well, with Lu saying it could jump from 10 at the end of 2023 to 60 by the end of 2024.
Runpod stacks up well with the other companies on the list, with the average annual estimated revenue of companies on the list at $14 million. However, the $20 million raised by the Mount Laurel startup is the smallest total on the list. Lu, 39, said that the funding was raised more so out of luxury than a necessity, along with "the fact that we really did want to take it to the next level."
"Our long-term goal is really to be one of the leaders in defining what this next generation of computing looks like," Lu told the Business Journal.
