alt Hacker NewsOpenRouter raises $113M Series B
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Hi HN! OpenRouter co-founder and COO here. Lots of questions about why we raised!
First off: We remain founder-led and founder-controlled, and intend on being here for a long time, creating awesome products for builders all over the world. We are basically a bunch of tinkerers who like building things, and try to make stuff that we would like, when building with AI.
Since this is about the raise though, happy to share perspective on it.
We believe that strong companies should have a strong balance sheets. We touch large volumes of spend, and have large spend commits across the ecosystem; having the cash to withstand what may come is a responsible buy-down of risk, and makes the company extremely durable.
It also tells our larger customers and provider partners that we will be able to continue to serve them (and pay our bills) for a long time to come. We don't need venture dollars to continue scaling (indeed the business is healthy) but you know when you don't want to raise $100m? When you really need it!
This is also good validation to employees (current and future) that the value we are creating together is real. We also take seriously our obligation to make a return for anyone who invests; we aren't valuationmaxxing and have the privilege of getting to pick who we work with. I don't think that gets a lot of airtime in the overall start-up world, but I think it's important!
Happy to answer questions and THANK YOU to everyone here who uses OpenRouter, and to everyone who has feedback for how we can improve!
As someone who uses OpenRouter extensively (and wrote an unintentional adjacent PR piece a few days ago: https://news.ycombinator.com/item?id=48317294 ), it's definitely the best way to try out new models without fiddling with each providers distinct APIs which is becoming a recurring concern as of late.
That said, I don't understand the people who use something a full agentic backbone with expensive models like Claude Opus with OpenRouter because that 5% surcharge is meaningful at that level of cost instead of going with the source API providers. But people are clearly doing it, and it's pure revenue.
I think that OpenRouter will continue to be very popular while there lots of experimentation in the LLM space, and while the "current favorite" model continues to change between various frontier labs.
After things begin to settle down, we'll probably see a consolidation of both frontier and open-source models - and then OpenRouter will become less useful, because that 5% overhead is well worth it when you want to try 20 models from 10 labs, but harder to stomach when you only need 5 models from 2 providers, and each of those providers has its own API knobs that you can tune to make things even cheaper.
Is the Open in OpenRouter the same as in Open AI? I couldn’t find any repository or hosted code. Thought it'd be a open source, self hostable tool with a cloud offering but seems its just the latter?
One thing that OpenRouter makes easy is the ability to manage API keys (mint new ones, expiry/limits per key, etc.) that I wish that other providers would make possible/easier.
So many use cases, like sharing AI/assisted features externally, with the ability to use those features but also limit the fallout if its shared / used for other purposes, without jumping through more fallible hoops like safeguards etc.
Openrouter is popular because China, Russia, Belarus, Iran are blocked in Gemini, anthropic and openai. And you are able to pay with Bitcoin.
That's a lot of paying users
One thing I haven't seen mentioned here yet and really like about OpenRouter is their openrouter "meta" model, that automatically routes the prompt to an appropriately capable model. Saves me a ton of money on not routing everything through Opus, but not giving me bad results when I ask something more complex, which gets autorouted to Opus.
"Over the last six months, weekly volume on OpenRouter has grown from 5 trillion to 25 trillion tokens".
DAMN!!
That's 41+ million tokens every second. That scale is crazy for such a small team of 48-50 people overall.
Do you really need VC money to put a proxy in front of other APIs? For what exactly? Marketing? What exactly you want to maket? You're already known.
Infrastructure? For proxying requests more infrastructure? You could just pay Cloudflare.
More engineers? But you yourself are the stret seller for the same snake oil that engineers aren't anymore necessary
So what that 100 million dollars are for?
I’m still pretty skeptical about OpenRouter. I have a client implemented for them so I can use them with my harnesses, but at the same time that client was generated and tested in an hour or so just like all of the other llm provider clients that I have. Using these services interchangeably by just swapping out clients has so far been working well for me. I think when it comes down to it, the only real inconvenience that they’re solving is where I put my credit card number. Is there something key that I’m missing about this service (besides it being a nexus of attention) that warrants this kind of investment? Or is this truly the bar for starting a successful AI company :P
I was sort of hoping that they were bootstrapped or at least non-VC funded. I'm wary of them introducing consumer-unfriendly revenue-generating schemes.
Hm. Would be interesting to see the finance spreadsheets for this. Typically the B-round guys are looking for something approaching a 10x return. Can anyone justify OpenRouter being worth $1.1Bn? That seems really high for a “management”/man-in-the-middle play. But sure, AI and all. But I’m old enough to remember when every dot-com was a billion dollar valuation, too.
Using Tinfoil, Replicate, Cerebras, and OpenRouter. Competition is good.
OpenRouter’s biggest value to me is reducing switching costs between models. The markup matters at scale, but for exploration and early-stage development, the convenience is hard to beat.
At what valuation?
I’m a user and I like the routing layer and not having to change things up too much, but I’m not sure why a solid business model for this product would require this much money at this kind of valuation unless they’re trying to buy data center capacity to self-host models eventually?
OpenRouter is such a weird name for this. I thought it was going to be something like the Tomato firmware for routers, not some AI interface thing.
OpenRouter’s founder jumping from NFTs to AI has to be studied. Seriously the goat of sector rotation
Congrats to the OpenRouter team for securing this round of funding. The 5% surcharge for their pricing model may not be palatable to enterprises. In fact, the OpenRouter team could be a pivotal part of the enterprise GenAI stack if they can allow configurable, pluggable endpoints for routing directly to enterprise vetted endpoints to 1P/3P LLM APIs. A couple of large companies I’ve worked so far kinda have this system in place, albeit the dev and maintenance cost and of setting up such an “LLM gateway” could be significantly reduced with OpenRouter. I feel that this is largely an ignored, forgotten part of operating GenAI apps at scale.
An amazing service. I use its 20+ free LLM options to allow completely free usage of LibreOffice AI extension with no signup https://librethinker.com .
I still don't get the value proposition: You rarely have to use all the models, you will likely end up with a few for your workflow but there is a way to use them/try all if you wanted to, neato.
Also one scary issue I had with OpenRouter in the early days, I think I saw somebody else's context and there were weird Chinese characters, haven't touched it since.
OpenRouter is our primary provider for evaluation data, and we've been really happy with them!
I'm sure they're experiencing growing pains, but a larger model selection (and faster releases for open weights models), would keep us from using other providers. For example, it took much longer than it should have to get Qwen 3.6 ~30B class models released (almost 2 weeks if I recall)
U can broadcast your tokens I wonder how to do something with such data. Aside from greping for secrets
Is they’re siphoning data that’s worth millions but the product is worth nothing.
How quickly they get new models supported on the API and it just works, is insane!
Tried using the service and immediately switched off noticing the delay and unreliability of the proxy
I honestly thought this was some kind of OpenWRT firmware for routers until I clicked the link. "Ahhh, AI. Of course."
What's the business model? Their core functionality, while useful, seems like something that will just be an open-source package. I assume there will be some Saas layer on top of it?
Too bad api use is like 100x more expensive than subscriptions for the big 3.
> ... with participation from NVentures (NVIDIA's venture capital arm), ServiceNow Ventures, MongoDB Ventures, Snowflake Ventures, Databricks Ventures ...
Are tech companies FOMOing so hard that they're now all running AI venture arms themselves instead of you know, developing their own products? Except for NVIDIA who needs to keep pumping the bubble I didn't expect the others.
Maybe I'm just a casual user, but I'm a bit surprised at the negativity in this thread.
The 5% fee is a rounding error for your average small time user, and it makes testing new models as simple as changing one string.
Can spin up separate models for separate budgets too.
It's a really simple product that just works
Why does a company with a seemingly health business model that is already churning profits and doesnt require large CapEx, taking losses to capture users, need to be raising this kind of capital?
Every tech company now seems to be invested in every AI startup.
Ok I’ve read the comments I still don’t see it. What’s the 113M in value add here?
Aren’t they totally dependent on the good will of the model providers?
really sucks that you guys use discord over a forum
One well known problem with OpenRouter is routing to poor quality model providers who quant the models.
So you think for example you're using Kimi k2.6....but behind the scenes, it's the 4b or 8b quantized versions.
So for open source models, I've started using the providers own service. In the case of Kimi, I don't trust any provider other than moonshot not to quant the model. So far this seems to be getting better results.
If I see a provider not specifiying if they quant or not, I assume that they do.
I'll still use OpenRouter to try new models out, but not for any real work.
I like OpenRouter - lets me test out new model quickly and easily. I would still need a good functioning mobile application for it.
I think they should go in this direction: they should make their own Model Agnostic versions of whatever functionalities other AI companies are making. Examples
1. personal chat app
2. the chat app working with their own implementation of memory
3. coding harnesses that are model agnostic
When I think of OpenRouter, I should think of "model agnostic LLM tools".
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It took me quite a while to come round to OpenRouter. Originally I didn't understand why anyone would put a proxy between them and an LLM, but it actually adds some quite significant value:
1. By far the lowest friction way to support and try out all the models.
2. They offer billing caps! Most model providers still don't do this [EDIT: maybe they do, see reply comment], but if you're going to run anything in public it's very useful to have hard limits so it doesn't cost you $1m overnight because someone started abusing it.
3. Their rankings are one of the more interesting signals for which models are popular, despite their flaws (most OpenAI and Anthropic users don't go via OpenRouter, it's currently not possible to tell the difference between many users switching v.s. one "whale" changing their preferred model)
Given how API costs are becoming meaningful for a lot of companies now, having a provider like OpenRouter to help measure your spend and easily experiment with and switch providers feels like a valuable service.