Railway, a San Francisco-based cloud platform that has quietly amassed two million developers without spending on marketing, announced Thursday a $100 million Series B funding round. The investment comes as surging demand for AI applications exposes limitations of legacy cloud infrastructure.
TQ Ventures led the round, with participation from FPV Ventures, Redpoint, and Unusual Ventures. The funding positions Railway as a major infrastructure startup amid the AI boom, capitalizing on developer frustration with the complexity and cost of traditional platforms like AWS 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?" said Jake Cooper, Railway's 28-year-old founder and CEO. "The last generation of cloud primitives were slow and outdated, and now with AI moving everything faster, teams simply can't keep up."
Railway previously raised just $24 million total, including a $20 million Series A in 2022. The company now processes over 10 million deployments monthly and handles over one trillion requests through its edge network.
From Three Minutes to Under One Second
Railway's pitch hinges on a simple observation: deployment tools were designed for a slower era. Standard build-and-deploy cycles using tools like Terraform take two to three minutes—a bottleneck as AI coding assistants 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 said. The company claims deployments in under one second, with customers reporting tenfold increases in developer velocity and up to 65% cost savings.
Daniel Lobaton, CTO at G2X, saw deployment speeds improve sevenfold and costs drop 87% after migrating, from $15,000 per month to about $1,000. "The work that used to take me a week on our previous infrastructure, I can do in Railway in like a day," he said.
Vertical Integration: Abandoning Google Cloud for Custom Data Centers
In 2024, Railway made the bold decision to abandon Google Cloud and build its own data centers. This vertical integration allows full control over network, compute, and storage layers.
"We wanted to design hardware in a way where we could build a differentiated experience," Cooper said. This approach helped Railway stay online during recent widespread outages affecting major cloud providers.
Railway's pricing undercuts hyperscalers by about 50% and newer cloud startups by three to four times. It charges per second for actual compute usage, with no charges for idle virtual machines.
30 Employees, Tens of Millions in Revenue
With just 30 employees, Railway generates tens of millions in annual revenue, growing 3.5x last year and 15% month-over-month. The company hired its first salesperson only last year and employs just two solutions engineers. Nearly all users came through word of mouth.
"We basically did the standard engineering thing: if you build it, they will come," Cooper said. "And to some degree, they came."
Enterprise Adoption
Despite its grassroots origins, Railway claims 31% of Fortune 500 companies now use its platform. Customers include Bilt, Intuit's GoCo, TripAdvisor's Cruise Critic, and MGM Resorts. Kernel, a Y Combinator-backed startup, runs its entire customer-facing system on Railway for $444 per month.
"At my previous company Clever, which sold for $500 million, I had six full-time engineers just managing AWS," said Rafael Garcia, Kernel's CTO. "Now I have six engineers total, and they all focus on product."
For enterprises, Railway offers SOC 2 Type 2 compliance, HIPAA readiness, single sign-on, audit logs, and the option to deploy within existing cloud environments.