Railway, a San Francisco-based cloud platform that has quietly amassed two million builders with out spending a greenback on advertising and marketing, introduced Thursday that it raised $100 million in a Sequence B funding spherical, as surging demand for synthetic intelligence functions exposes the constraints of legacy cloud infrastructure.
TQ Ventures led the spherical, with participation from FPV Ventures, Redpoint, and Uncommon Ventures. The funding values Railway as one of the crucial vital infrastructure startups to emerge throughout the AI increase, capitalizing on developer frustration with the complexity and price of conventional platforms like Amazon Net Companies and Google Cloud.
"As AI models get better at writing code, more and more people are asking the age-old question: where, and how, do I run my applications?" stated Jake Cooper, Railway's 28-year-old founder and chief government, in an unique interview with VentureBeat. "The last generation of cloud primitives were slow and outdated, and now with AI moving everything faster, teams simply can't keep up."
The funding is a dramatic acceleration for an organization that has charted an unconventional path by means of the cloud computing {industry}. Railway raised simply $24 million in complete earlier than this spherical, together with a $20 million Sequence A from Redpoint in 2022. The corporate now processes greater than 10 million deployments month-to-month and handles over one trillion requests by means of its edge community — metrics that rival far bigger and better-funded opponents.
Why three-minute deploy occasions have change into unacceptable within the age of AI coding assistants
Railway's pitch rests on a easy statement: the instruments builders use to deploy and handle software program had been designed for a slower period. A regular build-and-deploy cycle utilizing Terraform, the industry-standard infrastructure software, takes two to 3 minutes. That delay, as soon as tolerable, has change into a essential bottleneck as AI coding assistants like Claude, ChatGPT, and Cursor can generate working code in seconds.
"When godly intelligence is on tap and can solve any problem in three seconds, those amalgamations of systems become bottlenecks," Cooper advised VentureBeat. "What was really cool for humans to deploy in 10 seconds or less is now table stakes for agents."
The corporate claims its platform delivers deployments in below one second — quick sufficient to maintain tempo with AI-generated code. Clients report a tenfold improve in developer velocity and as much as 65 p.c value financial savings in comparison with conventional cloud suppliers.
These numbers come immediately from enterprise purchasers, not inside benchmarks. Daniel Lobaton, chief expertise officer at G2X, a platform serving 100,000 federal contractors, measured deployment velocity enhancements of seven occasions sooner and an 87 p.c value discount after migrating to Railway. His infrastructure invoice dropped from $15,000 per 30 days to roughly $1,000.
"The work that used to take me a week on our previous infrastructure, I can do in Railway in like a day," Lobaton stated. "If I want to spin up a new service and test different architectures, it would take so long on our old setup. In Railway I can launch six services in two minutes."
Contained in the controversial choice to desert Google Cloud and construct knowledge facilities from scratch
What distinguishes Railway from opponents like Render and Fly.io is the depth of its vertical integration. In 2024, the corporate made the weird choice to desert Google Cloud completely and construct its personal knowledge facilities, a transfer that echoes the well-known Alan Kay maxim: "People who are really serious about software should make their own hardware."
"We wanted to design hardware in a way where we could build a differentiated experience," Cooper stated. "Having full control over the network, compute, and storage layers lets us do really fast build and deploy loops, the kind that allows us to move at 'agentic speed' while staying 100 percent the smoothest ride in town."
The method paid dividends throughout current widespread outages that affected main cloud suppliers — Railway remained on-line all through.
This soup-to-nuts management allows pricing that undercuts the hyperscalers by roughly 50 p.c and newer cloud startups by three to 4 occasions. Railway costs by the second for precise compute utilization: $0.00000386 per gigabyte-second of reminiscence, $0.00000772 per vCPU-second, and $0.00000006 per gigabyte-second of storage. There are not any costs for idle digital machines — a stark distinction to the normal cloud mannequin the place prospects pay for provisioned capability whether or not they use it or not.
"The conventional wisdom is that the big guys have economies of scale to offer better pricing," Cooper famous. "But when they're charging for VMs that usually sit idle in the cloud, and we've purpose-built everything to fit much more density on these machines, you have a big opportunity."
How 30 staff constructed a platform producing tens of hundreds of thousands in annual income
Railway has achieved its scale with a workforce of simply 30 staff producing tens of hundreds of thousands in annual income — a ratio of income per worker that will be distinctive even for established software program firms. The corporate grew income 3.5 occasions final yr and continues to develop at 15 p.c month-over-month.
Cooper emphasised that the fundraise was strategic relatively than vital. "We're default alive; there's no reason for us to raise money," he stated. "We raised because we see a massive opportunity to accelerate, not because we needed to survive."
The corporate employed its first salesperson solely final yr and employs simply two options engineers. Practically all of Railway's two million customers found the platform by means of phrase of mouth — builders telling different builders a couple of software that truly works.
"We basically did the standard engineering thing: if you build it, they will come," Cooper recalled. "And to some degree, they came."
From aspect tasks to Fortune 500 deployments: Railway's unlikely company enlargement
Regardless of its grassroots developer group, Railway has made vital inroads into giant organizations. The corporate claims that 31 p.c of Fortune 500 firms now use its platform, although deployments vary from company-wide infrastructure to particular person workforce tasks.
Notable prospects embody Bilt, the loyalty program firm; Intuit's GoCo subsidiary; TripAdvisor's Cruise Critic; and MGM Resorts. Kernel, a Y Combinator-backed startup offering AI infrastructure to over 1,000 firms, runs its complete customer-facing system on Railway for $444 per 30 days.
"At my previous company Clever, which sold for $500 million, I had six full-time engineers just managing AWS," stated Rafael Garcia, Kernel's chief expertise officer. "Now I have six engineers total, and they all focus on product. Railway is exactly the tool I wish I had in 2012."
For enterprise prospects, Railway affords safety certifications together with SOC 2 Sort 2 compliance and HIPAA readiness, with enterprise affiliate agreements obtainable upon request. The platform gives single sign-on authentication, complete audit logs, and the choice to deploy inside a buyer's current cloud surroundings by means of a "bring your own cloud" configuration.
Enterprise pricing begins at customized ranges, with particular add-ons for prolonged log retention ($200 month-to-month), HIPAA BAAs ($1,000), enterprise assist with SLOs ($2,000), and devoted digital machines ($10,000).
The startup's daring technique to tackle Amazon, Google, and a brand new era of cloud rivals
Railway enters a crowded market that features not solely the hyperscale cloud suppliers—Amazon Net Companies, Microsoft Azure, and Google Cloud Platform—but additionally a rising cohort of developer-focused platforms like Vercel, Render, Fly.io, and Heroku.
Cooper argues that Railway's opponents fall into two camps, neither of which has absolutely dedicated to the brand new infrastructure mannequin that AI calls for.
"The hyperscalers have two competing systems, and they haven't gone all-in on the new model because their legacy revenue stream is still printing money," he noticed. "They have this mammoth pool of cash coming from people who provision a VM, use maybe 10 percent of it, and still pay for the whole thing. To what end are they actually interested in going all the way in on a new experience if they don't really need to?"
In opposition to startup opponents, Railway differentiates by overlaying the complete infrastructure stack. "We're not just containers; we've got VM primitives, stateful storage, virtual private networking, automated load balancing," Cooper stated. "And we wrap all of this in an absurdly easy-to-use UI, with agentic primitives so agents can move 1,000 times faster."
The platform helps databases together with PostgreSQL, MySQL, MongoDB, and Redis; gives as much as 256 terabytes of persistent storage with over 100,000 enter/output operations per second; and allows deployment to 4 world areas spanning the US, Europe, and Southeast Asia. Enterprise prospects can scale to 112 vCPUs and a couple of terabytes of RAM per service.
Why buyers are betting that AI will create a thousand occasions extra software program than exists at present
Railway's fundraise displays broader investor enthusiasm for firms positioned to profit from the AI coding revolution. As instruments like GitHub Copilot, Cursor, and Claude change into customary fixtures in developer workflows, the amount of code being written — and the infrastructure wanted to run it — is increasing dramatically.
"The amount of software that's going to come online over the next five years is unfathomable compared to what existed before — we're talking a thousand times more software," Cooper predicted. "All of that has to run somewhere."
The corporate has already built-in immediately with AI programs, constructing what Cooper calls "loops where Claude can hook in, call deployments, and analyze infrastructure automatically." Railway launched a Mannequin Context Protocol server in August 2025 that permits AI coding brokers to deploy functions and handle infrastructure immediately from code editors.
"The notion of a developer is melting before our eyes," Cooper stated. "You don't have to be an engineer to engineer things anymore — you just need critical thinking and the ability to analyze things in a systems capacity."
What Railway plans to do with $100 million and nil advertising and marketing expertise
Railway plans to make use of the brand new capital to develop its world knowledge middle footprint, develop its workforce past 30 staff, and construct what Cooper described as a correct go-to-market operation for the primary time within the firm's five-year historical past.
"One of my mentors said you raise money when you can change the trajectory of the business," Cooper defined. "We've built all the required substrate to scale indefinitely; what's been holding us back is simply talking about it. 2026 is the year we play on the world stage."
The corporate's investor roster reads like a who's who of developer infrastructure. Angel buyers embody Tom Preston-Werner, co-founder of GitHub; Guillermo Rauch, chief government of Vercel; Spencer Kimball, chief government of Cockroach Labs; Olivier Pomel, chief government of Datadog; and Jori Lallo, co-founder of Linear.
The timing of Railway's enlargement coincides with what many in Silicon Valley view as a elementary shift in how software program will get made. Coding assistants are now not experimental curiosities — they’ve change into important instruments that hundreds of thousands of builders depend on every day. Every line of AI-generated code wants someplace to run, and the incumbents, by Cooper's telling, are too wedded to their current enterprise fashions to completely capitalize on the second.
Whether or not Railway can translate developer enthusiasm into sustained enterprise adoption stays an open query. The cloud infrastructure market is affected by promising startups that failed to interrupt the grip of Amazon, Microsoft, and Google. However Cooper, who beforehand labored as a software program engineer at Wolfram Alpha, Bloomberg, and Uber earlier than founding Railway in 2020, appears unfazed by the size of his ambition.
"In five years, Railway [will be] the place where software gets created and evolved, period," he stated. "Deploy instantly, scale infinitely, with zero friction. That's the prize worth playing for, and there's no bigger one on offer."
For a corporation that constructed a $100 million enterprise by doing the other of what standard startup knowledge dictates — no advertising and marketing, no gross sales workforce, no enterprise hype—the actual check begins now. Railway spent 5 years proving that builders would discover a higher mousetrap on their very own. The following 5 will decide whether or not the remainder of the world is able to get on board.
