Encord raises €50M to build the data layer for physical AI

London-based data infrastructure startup Encord has closed a €50 million ($60 million) Series C funding round, led by Wellington Management, with participation from existing backers including Y Combinator, CRV, N47, Crane Venture Partners and Harpoon Ventures, alongside new investors Bright Pixel Capital and Isomer Capital.

The round brings total capital raised to about €93 million ($110 million) since the company’s founding.

The investment arrives at a moment when artificial intelligence is extending beyond text and images into the physical world, powering robots, autonomous vehicles, drones and other intelligent machines.

Encord positions itself at the heart of that shift by building a unified data infrastructure designed specifically for physical AI use cases, where complex, multimodal datasets are the fuel that enables models to perform reliably in real-world environments.

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Physical AI systems generate and depend on extremely rich data. Unlike large language models trained on static text, autonomous machines rely on streams of video, sensor feeds, lidar scans, audio and telemetry captured in dynamic settings.

Legacy data tools, designed for labelled images or text, struggle to handle this scale and diversity. Encord’s platform automates the full data lifecycle, from ingestion and organisation to annotation, curation and evaluation, helping development teams build and retrain models with traceability and performance insight.

Co-founder and co-CEO Ulrik Stig Hansen has repeatedly emphasised that for physical AI, the bottleneck is not the size of the models but the quality and readiness of the data feeding them.

Even sophisticated algorithms will underperform if the underlying datasets are inconsistent or misaligned with real-world conditions.

Encord says its platform currently manages more than 5 petabytes of multimodal data, roughly triple the volume from a year ago, and that revenue from physical AI customers has increased by an order of magnitude over the same period.

Its customer roster now exceeds 300 teams globally and includes names such as Woven by Toyota, Zipline, Skydio and AXA Financial.

Market context

Investors’ focus on Encord reflects a broader trend in European and global AI funding where infrastructure plays, not just models, are attracting venture capital. Large rounds in French model developers, UK cloud and data centre players, and Berlin-based autonomy platforms illustrate this shift.

In this landscape, Encord’s raise underscores confidence that the next frontier of AI adoption will be in embedded systems operating outside of data centres and behind screens.

With fresh capital, the company plans to accelerate its product roadmap and expand into new markets, further positioning its software as a foundational layer for the evolving physical AI stack.