AI data labeler Handshake buys Cleanlab, an acquisition target of multiple others

AI data-labeling startup Handshake has acquired data label-auditing startup Cleanlab, the companies tell TechCrunch.

Handshake began in 2013 as a platform for hiring college grads and launched a human data-labeling business about a year ago to serve foundational AI model companies. Cleanlab, founded in 2021, is a startup that provides software for improving the quality of data produced by human labelers.

The deal’s purpose is primarily to acquire talent, aka an acqui-hire, adding nine key Cleanlab employees to Handshake’s research organization. This includes the startup’s co-founders, who earned their PhDs in computer science from MIT: Curtis Northcutt (pictured above), Jonas Mueller, and Anish Athalye. The terms of the transaction were not disclosed (though, as we previously reported, sometimes an acqui-hire 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’s researchers are experts in developing algorithms that flag incorrect data without a second human reviewer. The goal is to improve the quality of the data Handshake produces for AI labs.

“We have an in-house research team that thinks a lot about where our models are weak, what data should we be producing? How high quality is that data?” Sahil Bhaiwala, chief strategy and innovation officer at Handshake told TechCrunch. “The Cleanlab team has been focusing on this problem for years.”

Northcutt, the Cleanlab CEO who’s credited with pioneering its automated data-labeling auditing, said the company received acquisition interest from other AI data-labeling companies. But the startup chose to sell to Handshake because, he said, data-labeling competitors, including Mercor, Surge, and Scale AI, frequently use Handshake’s platform to source human experts such as doctors, lawyers, and scientists for their data-labeling projects.

“If you’re going to pick one, you should probably pick the source, not the middleman,” Northcutt told TechCrunch.

Handshake, which was last valued at $3.3 billion in 2022, was forecasted to end 2025 at $300 million in annualized revenue run rate (ARR) and is reportedly on track to reach an ARR of “high hundreds of millions” this year. The company has provided data for eight top AI labs, including OpenAI.