Encord Raises $60M for 'Physical AI'
Data infrastructure startup Encord secured $60 million in a Series C funding round to scale its AI-native platform. The company focuses on "physical AI" by integrating and managing spatial data from sources like robots, drones, and sensors. The funding positions Encord as a challenger to Scale AI, highlighting investor interest in platforms that bridge the physical and digital worlds with real-time spatial intelligence.
This latest $60 million funding round, led by Wellington Management, brings Encord's total capital raised to $110 million and sets its valuation at $550 million. The round saw participation from existing investors including Y Combinator and CRV, alongside new backers like Bright Pixel Capital and Isomer Capital. Encord was co-founded in London in 2020 by Eric Landau, a former quantitative researcher at DRW, and Ulrik Stig Hansen, who previously worked at J.P. Morgan. The duo identified that the primary bottleneck in AI development was not the models themselves but the quality and curation of data used to train them. The company's platform is designed to manage and annotate complex multimodal data, including images, video, audio, LiDAR, and medical DICOM files. It serves over 300 clients like Woven by Toyota, drone delivery service Zipline, and the Mayo Clinic, providing tools for AI-assisted labeling and quality control. Encord has demonstrated significant traction, growing the data managed on its platform from 1 to 5 petabytes in the last year alone. During that same period, the company's revenue from customers in the physical AI sector increased tenfold. The term "physical AI" represents a rapidly expanding market, valued at approximately $5 billion in 2025 and projected to exceed $82 billion by 2035. This growth is fueled by increasing automation in manufacturing, logistics, healthcare, and autonomous vehicles. Encord's primary competitor, Scale AI, operates on a much larger scale, having raised a total of $15.9 billion. A June 2025 strategic investment from Meta for a 49% stake valued Scale AI at $29 billion, showcasing the immense investor appetite for AI data infrastructure.
