3 Bay Area high school friends and college drop-outs launched a $2 billion AI recruiting startup

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SAN FRANCISCO – Three Bay Area high school classmates who dropped out of college are now behind what’s believed to be one of the fastest-growing startups in the tech world, and they’re only 21 years old.

Their company is called Mercor, an artificial intelligence-driven recruiting site valued at $2 billion. 

What we know:

Founded by Brendan Foody, Adarsh Hiremath, Surya Midha, the young men are considered some of the youngest founders of a billion-dollar startup.

The co-founders attended Bellarmine College Preparatory School in San Jose and were part of the school’s highly ranked debate team.

Hiremath went on to Harvard University. Midha and Foody also headed east, both enrolling in Georgetown University. 

But the young men’s college lives didn’t last long. 

It’s a familiar Silicon Valley tech world success storyline à la some of the industry’s biggest innovators: Mark Zuckerberg and Steve Jobs– visionaries who left college to build their pioneering companies.  

In 2023, during their sophomore year, Hiremath, Midha, and Foody dropped out of college to start up Mercor.

The labor aggregator uses AI to create a jobs marketplace.

Mercor’s CEO on ‘The Four’

On Monday, Foody spoke on KTVU’s The Four to talk about the company he’s built with his friends.

It began with an idea in their dorm rooms, the young CEO explained, when the three were only 19 years old. Hiremath became the company’s chief technology officer and Midha its chief operations officer. 

Foody said Mercor seeks to streamline the hiring process and offer all qualified candidates access they might not get in a traditional model. 

What they’re saying:

“The company really grew out of working with phenomenally talented people all around the world, particularly in India at the time, where we were amazed that these talented people weren’t getting job opportunities,” the CEO said. “And it was because the hiring market was so wildly inefficient.”

Foody said that with the emergence of ChatGPt, he and his co-founders saw an opportunity to use AI machine learning Large Language Models, or LLMs, as a solution.  

“We got excited about how we could apply LLMs to solve that problem in emulating many of the processes a human would go through. So similar to how a human would review a resume, or conduct an interview and decide who to hire, we automate all of those with LLMs,” the CEO explained. 

Foody said his company’s platform offers a significantly more accurate process of picking the right job candidates while saving time and energy in the process. 

Part of that includes cutting out the arduous manual first step of weeding out unqualified candidates by going through thousands of resumes, according to the CEO. 

“One of the most important and nuanced parts of our platform is that we collect all of the performance data on how people do on the job. And so when our customers give that back to us, we use that to learn all of the attributes and characteristics of individuals that cause them to perform well,” the CEO explained.

Mercor uses a 20-miniute comprehensive AI interview that would include work experience, but might even take into account areas candidates are passionate about and projects they’ve taken on for fun.

The platform then uses the information to determine “how all of those features and characteristics translate into the end job performance that employers care about,” Foody explained.

Fast-growing company

Mercor has had a meteoric rise, which has captured the attention of many industry observers and investors.

“It’s grown a lot faster than we anticipated,” Foody said. 

By the numbers:

What began as a seven-figure annual revenue projection, Mercor raised $3.6 million dollars in 2023 in its first formal round of funding, and set up its headquarters in San Francisco.

It’s been wildly successful in its latest funding round as the company continues strong growth, according to Foody. 

“We recently crossed a $100M revenue run rate and have averaged 59% month-over-month growth for the last six months, making us the fastest growing company in the world. We are also extremely profitable,” the CEO said. 

With its $2 billion valuation, the platform has vetted more than 300,000 job applicants.

Dig deeper:

When asked about the overall concerns of AI taking over human positions, Foody acknowledged that it was the current reality driven by the rapidly evolving technology. 

“There are going to be jobs that are displaced and people will no longer do. But as with every new wave of innovation, we find the next thing right that people are going to work on, and it lifts the tide for everyone,” he said. “When we’re able to have more economic prosperity, we create, you know, more opportunities and allow people to focus on the things that they really are excited about doing.” 

Mercor’s young team 

The company’s founders reflect its young team.

Mercor’s employees are mostly composed of college drop-outs and recent graduates, according to the CEO, who added that as it continues to grow, it is starting to bring on some people with more experience.

Foody told KTVU that as he made plans to go to Washington, D.C.’s Georgetown for college, his parents predicted that their son would make his way back to the Bay Area, though nobody anticipated it would be so soon.

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As with the belief of embracing how AI technology is leading to an ever-changing and more efficient way of hiring and life, Foody said that for some, four years in college may not be the most efficient way to get a jump start on that innovative idea that could change landscapes. 

“I think school is just a place where people can practice skills, but those skills are often not super-correlated with what we actually do in our jobs,” the CEO said. “I think now that it’s becoming so much easier, and the barriers of building new companies and innovating are coming down, I expect that people will jump right into it.” 

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