Railway, a San Francisco-based cloud platform that has quietly amassed two million developers without spending a dollar on marketing, announced Thursday that it raised $100 million in a Series B funding round, as surging demand for artificial intelligence applications exposes the restrictions of legacy cloud infrastructure.
TQ Ventures led the round, with participation from FPV Ventures, Redpoint, and Unusual Ventures. The investment values Railway as probably the most significant infrastructure startups to emerge throughout the AI boom, capitalizing on developer frustration with the complexity and value of traditional platforms like Amazon Web Services and Google Cloud.
"As AI models recuperate at writing code, an increasing number of individuals are asking the age-old query: where, and the way, do I run my applications?" said Jake Cooper, Railway's 28-year-old founder and chief executive, in an exclusive interview with VentureBeat. "The last generation of cloud primitives were slow and outdated, and now with AI moving every thing faster, teams simply can't sustain."
The funding is a dramatic acceleration for a corporation that has charted an unconventional path through the cloud computing industry. Railway raised just $24 million in total before this round, including a $20 million Series A from Redpoint in 2022. The corporate now processes greater than 10 million deployments monthly and handles over one trillion requests through its edge network — metrics that rival far larger and better-funded competitors.
Why three-minute deploy times have turn into unacceptable within the age of AI coding assistants
Railway's pitch rests on a straightforward statement: the tools developers use to deploy and manage software were designed for a slower era. A typical build-and-deploy cycle using Terraform, the industry-standard infrastructure tool, takes two to a few minutes. That delay, once tolerable, has turn into a critical bottleneck as AI coding assistants like Claude, ChatGPT, and Cursor can generate working code in seconds.
"When godly intelligence is on tap and might solve any problem in three seconds, those amalgamations of systems turn into bottlenecks," Cooper told 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 under one second — fast enough to maintain pace with AI-generated code. Customers report a tenfold increase in developer velocity and as much as 65 percent cost savings in comparison with traditional cloud providers.
These numbers come directly from enterprise clients, not internal benchmarks. Daniel Lobaton, chief technology officer at G2X, a platform serving 100,000 federal contractors, measured deployment speed improvements of seven times faster and an 87 percent cost reduction after migrating to Railway. His infrastructure bill dropped from $15,000 monthly to roughly $1,000.
"The work that used to take me per week on our previous infrastructure, I can do in Railway in like a day," Lobaton said. "If I need to spin up a brand new service and test different architectures, it will take so long on our old setup. In Railway I can launch six services in two minutes."
Contained in the controversial decision to desert Google Cloud and construct data centers from scratch
What distinguishes Railway from competitors like Render and Fly.io is the depth of its vertical integration. In 2024, the corporate made the weird decision to desert Google Cloud entirely and construct its own data centers, a move that echoes the famous Alan Kay maxim: "People who find themselves really serious about software should make their very own hardware."
"We desired to design hardware in a way where we could construct a differentiated experience," Cooper said. "Having full control over the network, compute, and storage layers lets us do really fast construct and deploy loops, the sort that enables us to maneuver at 'agentic speed' while staying one hundred pc the smoothest ride on the town."
The approach paid dividends during recent widespread outages that affected major cloud providers — Railway remained online throughout.
This soup-to-nuts control enables pricing that undercuts the hyperscalers by roughly 50 percent and newer cloud startups by three to 4 times. Railway charges by the second for actual compute usage: $0.00000386 per gigabyte-second of memory, $0.00000772 per vCPU-second, and $0.00000006 per gigabyte-second of storage. There aren’t any charges for idle virtual machines — a stark contrast to the normal cloud model where customers pay for provisioned capability whether or not they use it or not.
"The standard wisdom is that the massive guys have economies of scale to supply higher pricing," Cooper noted. "But after they're charging for VMs that sometimes sit idle within the cloud, and we've purpose-built every thing to suit far more density on these machines, you’ve a giant opportunity."
How 30 employees built a platform generating tens of hundreds of thousands in annual revenue
Railway has achieved its scale with a team of just 30 employees generating tens of hundreds of thousands in annual revenue — a ratio of revenue per worker that may be exceptional even for established software firms. The corporate grew revenue 3.5 times last yr and continues to expand at 15 percent month-over-month.
Cooper emphasized that the fundraise was strategic fairly than obligatory. "We're default alive; there's no reason for us to lift money," he said. "We raised because we see a large opportunity to speed up, not because we wanted to survive."
The corporate hired its first salesperson only last yr and employs just two solutions engineers. Nearly all of Railway's two million users discovered the platform through word of mouth — developers telling other developers a couple of tool that truly works.
"We mainly did the usual engineering thing: in case you construct it, they’ll come," Cooper recalled. "And to a point, they got here."
From side projects to Fortune 500 deployments: Railway's unlikely corporate expansion
Despite its grassroots developer community, Railway has made significant inroads into large organizations. The corporate claims that 31 percent of Fortune 500 firms now use its platform, though deployments range from company-wide infrastructure to individual team projects.
Notable customers include Bilt, the loyalty program company; Intuit's GoCo subsidiary; TripAdvisor's Cruise Critic; and MGM Resorts. Kernel, a Y Combinator-backed startup providing AI infrastructure to over 1,000 firms, runs its entire customer-facing system on Railway for $444 monthly.
"At my previous company Clever, which sold for $500 million, I had six full-time engineers just managing AWS," said Rafael Garcia, Kernel's chief technology officer. "Now I even have six engineers total, and so they all deal with product. Railway is strictly the tool I wish I had in 2012."
For enterprise customers, Railway offers security certifications including SOC 2 Type 2 compliance and HIPAA readiness, with business associate agreements available upon request. The platform provides single sign-on authentication, comprehensive audit logs, and the choice to deploy inside a customer's existing cloud environment through a "bring your individual cloud" configuration.
Enterprise pricing starts at custom levels, with specific add-ons for prolonged log retention ($200 monthly), HIPAA BAAs ($1,000), enterprise support with SLOs ($2,000), and dedicated virtual machines ($10,000).
The startup's daring technique to tackle Amazon, Google, and a brand new generation of cloud rivals
Railway enters a crowded market that features not only the hyperscale cloud providers—Amazon Web Services, Microsoft Azure, and Google Cloud Platform—but in addition a growing cohort of developer-focused platforms like Vercel, Render, Fly.io, and Heroku.
Cooper argues that Railway's competitors fall into two camps, neither of which has fully committed to the brand new infrastructure model that AI demands.
"The hyperscalers have two competing systems, and so they haven't gone all-in on the brand new model because their legacy revenue stream continues to be printing money," he observed. "They’ve this mammoth pool of money coming from individuals who provision a VM, use perhaps 10 percent of it, and still pay for the entire thing. To what end are they really interested by going all the best way in on a brand new experience in the event that they don't actually need to?"
Against startup competitors, Railway differentiates by covering the total infrastructure stack. "We're not only containers; we've got VM primitives, stateful storage, virtual private networking, automated load balancing," Cooper said. "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 supports databases including PostgreSQL, MySQL, MongoDB, and Redis; provides as much as 256 terabytes of persistent storage with over 100,000 input/output operations per second; and enables deployment to 4 global regions spanning the US, Europe, and Southeast Asia. Enterprise customers can scale to 112 vCPUs and a couple of terabytes of RAM per service.
Why investors are betting that AI will create a thousand times more software than exists today
Railway's fundraise reflects broader investor enthusiasm for firms positioned to learn from the AI coding revolution. As tools like GitHub Copilot, Cursor, and Claude turn into standard fixtures in developer workflows, the amount of code being written — and the infrastructure needed to run it — is expanding dramatically.
"The quantity of software that's going to come back online over the subsequent five years is unfathomable in comparison with what existed before — we're talking a thousand times more software," Cooper predicted. "All of that has to run somewhere."
The corporate has already integrated directly with AI systems, constructing what Cooper calls "loops where Claude can hook in, call deployments, and analyze infrastructure mechanically." Railway released a Model Context Protocol server in August 2025 that enables AI coding agents to deploy applications and manage infrastructure directly from code editors.
"The notion of a developer is melting before our eyes," Cooper said. "You don't should be an engineer to engineer things anymore — you only need critical pondering and the power to investigate things in a systems capability."
What Railway plans to do with $100 million and 0 marketing experience
Railway plans to make use of the brand new capital to expand its global data center footprint, grow its team beyond 30 employees, and construct what Cooper described as a correct go-to-market operation for the primary time in the corporate's five-year history.
"One among my mentors said you raise money when you’ll be able to change the trajectory of the business," Cooper explained. "We've built all of the required substrate to scale indefinitely; what's been holding us back is solely talking about it. 2026 is the yr we play on the world stage."
The corporate's investor roster reads like a who's who of developer infrastructure. Angel investors include Tom Preston-Werner, co-founder of GitHub; Guillermo Rauch, chief executive of Vercel; Spencer Kimball, chief executive of Cockroach Labs; Olivier Pomel, chief executive of Datadog; and Jori Lallo, co-founder of Linear.
The timing of Railway's expansion coincides with what many in Silicon Valley view as a fundamental shift in how software gets made. Coding assistants aren’t any longer experimental curiosities — they’ve turn into essential tools that hundreds of thousands of developers depend on each day. Each line of AI-generated code needs somewhere to run, and the incumbents, by Cooper's telling, are too wedded to their existing business models to completely capitalize on the moment.
Whether Railway can translate developer enthusiasm into sustained enterprise adoption stays an open query. The cloud infrastructure market is affected by promising startups that didn’t break the grip of Amazon, Microsoft, and Google. But Cooper, who previously worked as a software engineer at Wolfram Alpha, Bloomberg, and Uber before founding Railway in 2020, seems unfazed by the size of his ambition.
"In five years, Railway [will be] the place where software gets created and evolved, period," he said. "Deploy immediately, scale infinitely, with zero friction. That's the prize price playing for, and there's no greater one on offer."
For a corporation that built a $100 million business by doing the other of what conventional startup wisdom dictates — no marketing, no sales team, no enterprise hype—the true test begins now. Railway spent five years proving that developers would find a greater mousetrap on their very own. The subsequent five will determine whether the remaining of the world is able to get on board.
