Chapter 1: What is the main topic discussed in this episode?
D.C.
Chapter 2: What is RunPod's origin story and how did it start?
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Tell Congress to guard your card and oppose the Durbin-Marshall credit card mandates.
Chapter 3: How did RunPod bootstrap to $24 million in revenue?
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Chapter 4: What unique strategies did RunPod use to acquire early customers?
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Chapter 5: How did RunPod transition from bootstrapping to raising venture capital?
Cox, one step ahead. Welcome to the podcast.
Chapter 6: What challenges did RunPod face in the competitive AI cloud market?
I'm your host, Jaden Schaefer. Today on the show, I want to talk about a company called RunPod. They're an AI cloud startup, and they just hit a $120 million in annual recurring revenue. And what's hilarious to me about them is that this whole company started from a Reddit post and they got some of the first investors from their customer support email. So anyways, it's an interesting company.
I want to dive into how they're able to raise the money, what they're doing and where they plan on going in the future.
Chapter 7: How has RunPod's funding strategy evolved over time?
Before we get into that, I wanted to mention if you want to build AI tools and you are not a developer like myself, I would love for you to check out AIbox.ai. This is my own vibe coding tool startup where you can explain any tool you want and we will link together different AI models for you, input prompts and build your tool for you. You can then go edit it, modify it and share it.
And it's an awesome way to build things if you are not a developer. So you can go check out.
Chapter 8: What role does AI infrastructure play for modern enterprises?
There's a link in the description to AIbox.ai and I would love to have you try it out and tell me what you think. All right, let's get into what's going on with RunPod. So this is a really impressive startup. I thought their kind of founding story was hilarious. They have two founders, Zen Liu and Pardeep Singh.
And apparently when they were starting the company, they actually were able to bootstrap to about $24 million in revenue. They have raised money now and they're at $120 million in annual recurring revenue. And they have also raised a $20 million seed round. But before all of that happened, they were able to bootstrap to $24 million. And the path of their company was hilarious.
One thing that I'll say is that they raised about $20 million when Radki Malik, that's a VC and a partner at Dell Technology Capital, he noticed them from a Reddit post and And then they also picked up an early angel from the Hugging Face co-founder, Julian Chomond, who apparently was just a big fan, was a big user. And he reached out to them from their support chat.
So they actually started the company in 2021. They were both co-workers at Comcast and they decided that they wanted to start a hobby, a side project, which is essentially that they built a custom GPU rig. This is in New Jersey and in like a basement space. And they were mining Ethereum with it.
They made some money, apparently, but they didn't really make enough money to actually pay back the equipment. So they weren't recouping their investment or anything. And so they were kind of coming to the end of the mining hype. Ethereum's network upgrade was about to happen, if anyone remembers the merge. So that was about to happen.
Anyways, they said that they got kind of bored of the project. Between them, they'd convinced their wives to let them buy about $50,000 worth of hardware. And so if they wanted to keep their wives happy, apparently they had to find a better use for the GPUs. So because of that... They both kind of worked on machine learning projects and they decided to turn their mining rig into AI servers.
It was like way before Chachapati and even before DALI too. So when they were rebuilding the system, they ran into a big problem and they said, quote, we were seeing just how awful the software stack was for working with GPUs. And so they decided that this is what they wanted to go and fix. And so that's kind of when they built RunPod. That's when it kind of came together.
Lou, the co-founder said, quote, the experience of developing software for top GPUs was just hot garbage. So then by 2022, they were ready to launch it. They kind of positioned themselves as a fast developer focused AI app. They were a hosting platform. They had kind of configurable hardware. They also had a serverless option and then a bunch of like APIs and integrations, all that kind of stuff.
At the time, though, he said that the integrations were really minimal and it was quite challenging for them to actually go find users. So they said, as first time founders, we had no idea how to market. So I thought, let's just post on Reddit. So they started just spamming Reddit, basically. in a bunch of different AI focused subreddits, they were giving free access in exchange for feedback.
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