Runpod Hits $120M ARR: Reddit-Fueled AI Cloud Startup Story

In a startup world obsessed with polished launches and big funding rounds, Runpod’s rise is refreshingly different. The AI cloud hosting startup has reached $120 million in annual recurring revenue (ARR) and it all started with a few Reddit posts.

Founded by Zhen Lu and Pardeep Singh, former corporate developers at Comcast, Runpod is proof that timing, product quality, and community-driven growth can beat traditional playbooks.

From Crypto Mining to AI Infrastructure

In late 2021, Lu and Singh were experimenting with Ethereum mining from their New Jersey basements. Between them, they spent nearly $50,000 on GPUs. The returns? Disappointing.

Worse, Ethereum mining was coming to an end with The Merge. The hobby became boring and costly. With expensive hardware sitting idle, they looked for another use.

Both founders had experience working on machine learning projects. So they repurposed their mining rigs into AI servers, long before ChatGPT or DALL·E 2 went mainstream.

That’s when they hit a major pain point.

“The software stack for working with GPUs was just hot garbage,” Lu said.

Instead of complaining, they decided to fix it.

The Birth of Runpod

Runpod was built to make developing and deploying AI applications on GPUs fast, simple, and developer-friendly. The platform focused on:

Easy GPU configuration
Serverless AI hosting
APIs and command-line tools
Integrations like Jupyter notebooks

At the time, these tools were rare and badly needed.

But there was one big challenge: marketing.

Growth That Started on Reddit

As first-time founders with no marketing budget, Lu did the simplest thing possible.

He posted on Reddit.

In a few AI-focused subreddits, Runpod offered free access to AI servers in exchange for feedback. The response was immediate. Developers signed up, tested the product, and shared feedback.

Free users turned into paying users.

Within nine months, Runpod:

Reached $1 million in revenue
Quit their full-time jobs
Validated real market demand

Reddit didn’t just give them users, it gave them a community.

Bootstrapping Without a Free Tier

As Runpod grew, business users wanted production-grade infrastructure not servers running in someone’s basement.

Instead of raising VC money early, the founders:

Partnered with data centers
Used revenue-sharing models
Avoided debt completely
Never offered a free tier

Runpod had to pay for itself from day one.

This discipline helped the company survive nearly two years without external funding, even as GPU demand exploded after ChatGPT launched.

VCs Found Them the Same Way Users Did

Ironically, Runpod didn’t chase investors.

VCs found them on Reddit.

Radhika Malik from Dell Technologies Capital noticed Runpod’s posts and reached out. She became their first VC conversation—guiding Lu through how investors think.

Another surprise came when Julien Chaumond, co-founder of Hugging Face, reached out directly through Runpod’s support chat. He was already using the product.

By May 2024, Runpod had:

Over 100,000 developers
Strong revenue growth
Massive AI market tailwinds

They closed a $20 million seed round, co-led by Dell and Intel’s venture arms, with angels like Nat Friedman and Chaumond.

$120M ARR and 500,000 Developers

Today, Runpod is operating at serious scale:

$120M ARR
500,000 developers
31 global regions
Customers include Replit, Cursor, OpenAI, Perplexity, Wix, and Zillow
Enterprise clients spending millions annually

And they’ve done it while competing with giants like AWS, Google Cloud, Microsoft Azure, and AI-focused players like CoreWeave.

Why Runpod Still Wins

Runpod’s edge isn’t size it’s focus.

The platform is built by developers, for developers. The founders believe coding isn’t disappearing, it’s evolving. Developers are becoming AI agent builders and operators, not just traditional programmers.