As artificial intelligence makes coding dramatically faster, the next big challenge in software development is testing and validating all that code. Blacksmith, a startup that specializes in AI-powered code testing, has raised a new $45 million round to capitalize on that shift.
The Series B round, led by Peak XV Partners, values Blacksmith at $550 million, up from the $60 million valuation it was assigned when it raised a $10 million Series A less than a year ago. Existing investors GV and Y Combinator also participated, bringing the startup’s total funding to $58.5 million.
Founded in 2024, Blacksmith helps companies build, test, and verify software before it reaches production. The startup now serves more than 5,000 customers, including Mercury, Supabase, Clerk, Ashby, and Expensify, up from more than 700 customers less than a year ago, co-founder and CEO Aditya Jayaprakash said in an exclusive interview.
The rise of AI coding tools such as Cursor, OpenAI’s Codex, and Anthropic’s Claude Code has made it significantly easier for software teams to generate code, but the quality of AI-generated code is not a given. “Validating code is still a bottleneck, and it’s an even bigger bottleneck because people are writing even more,” Jayaprakash said.
Blacksmith started as a cloud provider for continuous integration (CI) workloads, helping companies run the software builds and tests needed to validate code before it reaches production. The startup has since broadened its platform with Codesmith, an AI coding agent that can automatically fix failed code checks.
Jayaprakash said Blacksmith reached a $10 million annualized revenue run rate with just 10 employees and has since grown its workforce to about 30 and grown revenue to “tens of millions of dollars.” He declined to provide a specific updated ARR figure, though did say some of its largest customers now spend more than $1 million a year on the platform.
While that appears to be solid and fast progress, Blacksmith is operating in a crowded market. Its key competitors include GitHub Actions, Cursor Automations, validation capabilities baked into Codex and Claude Code, numerous other startups, and AI code-testing services offered by Amazon Web Services, Microsoft Azure, and Google Cloud.
Jayaprakash said his startup is competing on the speed of testing code as well as affordability. Looking ahead, Jayaprakash said that Blacksmith plans to expand into a broader suite of coding tools, aiming to help developers write, validate, and merge software faster.
The rapid valuation surge reflects a broader trend in the software development industry. As generative AI models become more capable at writing code, the volume of code produced by developers is accelerating. However, the ability to ensure that code is correct, secure, and performant has not kept pace. This mismatch has created a critical opportunity for startups like Blacksmith that focus on the validation layer of the software delivery lifecycle.
Blacksmith’s platform is designed to handle the entire testing process, from running unit tests to orchestrating complex integration tests across distributed systems. The company’s infrastructure is optimized for speed, allowing developers to get feedback on their code in minutes rather than hours. This is particularly important in modern development environments where continuous integration and continuous deployment (CI/CD) pipelines are expected to run seamlessly.
The introduction of Codesmith, the AI coding agent, marks a significant evolution for the company. Instead of simply identifying failed code checks, Codesmith can analyze the failure, generate a fix, and submit a pull request for review. This autonomous approach reduces the time developers spend on debugging and allows them to focus on higher-level tasks. The agent is trained on millions of code repositories and can understand the context of a project, including its dependencies and configuration files.
Blacksmith’s customer growth from 700 to over 5,000 in less than a year demonstrates strong market traction. The company has focused on serving mid-sized and enterprise companies that are adopting AI coding tools at scale. Customers such as Mercury, a fintech platform, and Supabase, an open-source Firebase alternative, rely on Blacksmith to ensure that their codebases remain stable as they iterate rapidly.
The competitive landscape for code testing is intensifying. GitHub Actions is the default CI/CD tool for millions of repositories, and it has been adding AI-powered features to help developers identify and fix bugs. Cursor, a popular AI code editor, has launched Automations that can run tests and review code within the editor. OpenAI’s Codex and Anthropic’s Claude Code both have built-in validation tools that allow developers to test code as they write it.
In addition to these developer tools, the major cloud providers are also entering the space. Amazon Web Services offers CodeGuru for automated code reviews and testing, Microsoft Azure has Azure DevOps with advanced testing capabilities, and Google Cloud provides Cloud Build and AI-powered testing recommendations. These services benefit from deep integration with their respective cloud ecosystems, but they often lack the specialized focus and speed that dedicated startups like Blacksmith provide.
Blacksmith differentiates itself by offering a high-performance testing infrastructure that is cloud-agnostic and compatible with a wide range of programming languages and frameworks. The platform uses machine learning algorithms to prioritize the most impactful tests and to predict which parts of the codebase are most likely to contain bugs. This intelligent test selection reduces the time required to validate code and minimizes the computational resources needed.
The company’s business model is based on usage-based pricing, which allows customers to scale their testing efforts without large upfront investments. This approach has resonated with startups and enterprises alike, especially in the current economic environment where companies are looking for cost-efficient ways to improve their software engineering productivity.
Jayaprakash, who previously worked at Google and has deep experience in distributed systems, founded Blacksmith in 2024. He was joined by several engineers who had worked on testing infrastructure at major tech companies. The team’s expertise in building high-scale systems has been instrumental in developing a platform that can handle millions of test runs per day.
The new funding will be used to accelerate product development, particularly in the area of AI-driven code generation and testing. Blacksmith plans to invest heavily in research and development to improve Codesmith’s ability to understand complex codebases and generate more accurate fixes. The company also intends to expand its go-to-market efforts, targeting larger enterprises and international markets.
One of the key areas of focus will be the integration of Blacksmith’s testing capabilities directly into developer workflows. The company is building integrations with popular code hosting platforms, chat tools, and project management software to make testing a seamless part of the development process. For example, developers could receive notifications in Slack when a test fails, along with a suggested fix from Codesmith.
Another area of innovation is the use of machine learning to generate test cases automatically. Currently, writing tests is a manual and time-consuming process. Blacksmith is exploring ways to analyze code and generate unit tests, integration tests, and end-to-end tests that cover critical paths. This could further reduce the burden on developers and increase the overall quality of software.
The startup is also addressing the challenge of testing AI-generated code specifically. As more code is produced by large language models, there is a growing need to verify that this code is not only syntactically correct but also logically sound and secure. Blacksmith is developing specialized tools that can detect common issues in AI-generated code, such as hallucinated APIs, incorrect function signatures, and security vulnerabilities.
Jayaprakash emphasized that Blacksmith’s mission is not just to test code but to make software development more reliable and efficient. “We believe that every developer should have access to world-class testing infrastructure,” he said. “Our goal is to remove the friction that prevents teams from shipping high-quality software quickly.”
The company’s rapid growth has not been without challenges. Finding and retaining top engineering talent is a priority, especially in a competitive market. Blacksmith has maintained a lean team of about 30 employees, relying on automation and AI to scale its operations. This efficiency has allowed the company to achieve impressive revenue growth while keeping costs under control.
Looking to the future, Blacksmith plans to expand into adjacent areas of the software development lifecycle. The company aims to help developers not only validate code but also write, merge, and deploy software faster. This could include features such as automated code reviews, intelligent merge conflict resolution, and deployment validation.
The company is also monitoring the evolution of AI coding assistants. As tools like Claude Code and Codex become more sophisticated, they may eventually incorporate more advanced testing capabilities. However, Jayaprakash believes that specialized testing platforms will still be needed because they offer deeper integration, better performance, and more comprehensive coverage than general-purpose AI tools.
Blacksmith’s valuation jump from $60 million to $550 million in under a year is a remarkable achievement, reflecting both the company’s execution and the growing importance of code-testing in the age of AI. With the new funding in place, Blacksmith is well-positioned to become a major player in the software development infrastructure market. The company’s ability to stay ahead of the curve and continue delivering value to its customers will determine whether it can sustain this momentum.
In the broader context, the software industry is undergoing a fundamental transformation. AI is not just a tool for writing code; it is changing the entire development process. Testing, which was once an afterthought, is now a critical competitive differentiator. Companies that can ship reliable software faster will have a significant advantage, and Blacksmith is aiming to be the platform that enables that.
The coming years will likely see further consolidation in the code-testing market, with larger players acquiring some of the startups that have emerged. Blacksmith, with its strong customer base and cutting-edge AI capabilities, is an attractive target. But for now, the company is focused on expanding its suite of tools and delivering on its promise of making software testing faster, more affordable, and more intelligent.
Source: TechCrunch News