Mercor, an AI-powered recruiting startup founded by three 21-year-old Thiel Fellows, has raised $100 million in a Series B round, valuing the company at $2 billion. The round, led by Menlo Park-based Felicis, marks a significant milestone for the two-year-old platform, which aims to revolutionize the hiring process using artificial intelligence.

The latest funding round brings Mercor's total valuation to eight times its previous valuation, with existing investors Benchmark, General Catalyst, and DST Global also participating. This significant investment underscores the growing demand for AI-driven hiring solutions, as companies increasingly turn to technology to streamline their recruitment processes.

Mercor's platform uses AI to automate resume screening, candidate matching, and even payroll management. Employers upload job descriptions, and Mercor's system recommends the best candidates, claiming to remove bias from the process. The startup's automated system has already attracted prominent clients, including tech companies such as OpenAI, which are leveraging Mercor's tools to find top talent.

Job seekers complete a 20-minute AI interview, which evaluates their skills and creates a profile. The platform then matches them with relevant full-time, part-time, or hourly roles. Mercor's CEO, Brendan Foody, explained that the company collects performance data on candidates to refine its predictions on who will perform best in the future.

Initially focused on hiring software engineers and tech professionals, Mercor has expanded its talent pool to cater to growing demand from AI labs and other industries. The startup has helped HR teams evaluate 468,000 applicants, with India, the U.S., Europe, and South America emerging as key talent sources.

The company's revenue has skyrocketed as companies increasingly adopt flexible work arrangements. With an annual revenue run rate of $75 million, Mercor's valuation gives it a 27x ARR multiple, a reasonable figure compared to the more inflated valuations seen in the industry.

However, Mercor's technology has also raised concerns about hiring bias and job displacement as AI advances. Foody argues that Mercor is not displacing workers but rather automating large parts of the economy, making workers more valuable in areas where they are still needed. He believes that Mercor will remain relevant in the long run, as companies prioritize expertise over tenure and hire specialists for short-term projects.

In terms of its own hiring, Mercor, with an average team age of 22, has recently hired the former Head of Human Data Operations at OpenAI and the previous Head of Growth at Scale. As the company continues to grow, it will be interesting to see how its AI-powered hiring platform shapes the future of work.