Peak XV Partners led a $45 million Series B funding round in San Francisco-based AI code testing startup Blacksmith at a $550 million valuation, the company announced this week. Existing investors Google Ventures and Y Combinator also participated in the round, which closed in March 2026. The latest funding brings Blacksmith’s total capital raised to $58.5 million, according to inc42.com.
Blacksmith was founded in 2024 by Aditya Jayaprakash, Aditya Maru, and Aayush Shah. Initially focused on helping developers automatically test code before deployment, the startup is now building tools to allow developers and AI agents to validate and merge code faster. CEO Jayaprakash explained in a company blog post that improvements in AI coding models have increased software production, creating a need for infrastructure to test and validate the code. Blacksmith’s platform has seen continuous integration jobs grow 5%-10% week-on-week since early 2026, driven by rising adoption of AI code generation tools.
The funding round highlights growing investor interest in AI and developer tools startups in the US. Blacksmith’s product addresses a critical bottleneck in software development as AI-generated code becomes more prevalent. With over 6,000 companies using its platform, Blacksmith competes in a market alongside other AI-driven developer infrastructure firms. The capital will be used primarily to expand computing infrastructure to meet increasing demand for code testing and validation services.
Blacksmith plans to deploy a significant portion of the fresh capital to scale its computing infrastructure. The company’s growth metrics and investor backing underscore the rising importance of AI-powered code testing in software development workflows, as reported by inc42.com.