Peak XV Leads $45 Mn Bet On US-Based AI Code Testing Startup Blacksmith

Peak XV Partners led a $45 Mn Series B funding round of San Francisco-based AI code testing startup Blacksmith at a valuation of $550 Mn, as the VC firm steps up investments in US-based AI and developer tools companies 

Existing investors Google Ventures (GV) and Y Combinator also participated in the round. Blacksmith closed the funding round in March 2026 but announced it now. The latest funding takes Blacksmith’s total capital raised to $58.5 Mn.

The startup plans to deploy a significant portion of the fresh capital to expand its computing infrastructure amid rising demand for tools that can test and validate AI-generated code. 

Blacksmith cofounder and CEO Aditya Jayaprakash said improvements in AI coding models are enabling developers to produce more software, creating a corresponding need for infrastructure to validate and test the code. 

“Every model improvement has expanded what coding agents can do and led to even more code being produced,” Jayaprakash said in a company blog post.

Founded in 2024 by Jayaprakash, Aditya Maru, and Aayush Shah, Blacksmith initially helped developers automatically test code before deployment. It is now building tools that allow developers and AI agents to validate and merge code faster. 

The startup said the number of continuous integration (CI) jobs run on its platform has grown 5%-10% week-on-week since the beginning of 2026, driven by the growing adoption of AI code generation tools. 

More than 6,000 companies now use Blacksmith, including Supabase, Clerk, Ashby and Mercury. 

Blacksmith is betting that existing CI infrastructure will struggle to handle the increase in pull requests and testing workloads as AI coding agents produce software at a faster pace.

The startup recently launched [code]smith, a cloud-based coding agent that can build features, fix bugs, diagnose CI failures, and automatically resolve them. It is also developing [code]smith QA, which will autonomously test code changes before they are merged. 

“The volume of code produced over the coming decade is only going to explode,” Jayaprakash said, adding that Blacksmith wants to help developers and AI agents validate and merge code faster. 

Blacksmith currently manages hundreds of thousands of CPU cores and plans to expand this footprint by around 10X over the coming months.

It competes with the likes of GitHub Actions, CircleCI, Buildkite, Depot, and Namespace. Blacksmith claims its purpose-built CI cloud infrastructure can run workloads up to twice as fast and at 50%-75% lower costs than GitHub-hosted runners.

Peak XV’s US Push

The investment comes as Peak XV expands its presence in the US and looks to tap AI and developer tools startups catering to the American market.

The VC firm began building its Bay Area presence after separating from Sequoia Capital in 2023. It subsequently hired operating partners in the US and brought former Y Combinator investor Arnav Sahu on board in 2025 to help lead its US investing efforts. 

Peak XV has since expanded its US team to eight members and opened its first San Francisco office. 

Its US portfolio includes San Francisco-based startups such as AI voice platform Vapi, AI memory infrastructure startup Mem0, AI sales training platform Hyperbound, and product development platform PostHog.

Peak XV has also backed Supabase, which offers an open-source alternative to Google’s Firebase, and AI infrastructure startup TrueFoundry.

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