Handshake, an AI data label startup, has acquired Cleanlab, a data label audit startup, the companies told TechCrunch.
Handshake started in 2013 as a platform for hiring college graduates and launched its human data labeling business about a year ago to serve basic AI modeling companies. Founded in 2021, Cleanlab is a startup that provides software that improves the quality of data created by human labelers.
The purpose of this transaction is primarily a talent acquisition, otherwise known as an acquisition, which will add nine key Clean Lab employees to Handshake’s research organization. This includes the startup’s co-founders Curtis Northcutt (pictured above), Jonas Mueller, and Anish Athalye, all of whom earned PhDs in computer science from MIT. Terms of the deal were not disclosed (though, as we previously reported, acquisitions can be surprisingly lucrative for founders).
Cleanlab has raised a total of $30 million from investors including Menlo Ventures, TQ Ventures, Bain Capital Ventures, and Databricks Ventures. At its peak, the startup had more than 30 employees.
Cleanlab researchers are experts at developing algorithms that flag incorrect data without a second human reviewer. The goal is to improve the quality of data that Handshake generates for AI labs.
“We have an in-house research team that thinks a lot about where our models are weak, what data we should generate, and how high-quality that data should be,” Sahil Bajwala, Handshake’s chief strategy and innovation officer, told TechCrunch. “The Cleanlab team has been focused on this issue for years.”
Northcutt, CEO of Clean Labs, known as a pioneer in automated data labeling and auditing, said his company has received acquisition interest from other AI data labeling companies. However, the startup said it chose to sell to Handshake because data labeling competitors such as Mercor, Surge, and Scale AI frequently use Handshake’s platform to source experts such as doctors, lawyers, and scientists for data labeling projects.
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“If you have to choose one, you should probably choose the source over the intermediary,” Northcutt told TechCrunch.
Handshake was last valued at $3.3 billion in 2022, and is expected to reach an annual revenue run rate (ARR) of $300 million by the end of 2025, with ARR reportedly expected to reach “the high hundreds of millions of dollars” this year. The company provides data to eight top AI labs, including OpenAI.
