US-based Modal Labs nears $750M round at $15.75B valuation — TechCrunch
New York-based US company Modal Labs, which provides infrastructure for artificial intelligence inference, is nearing a $750 million funding round at a $15.75 billion valuation, including the new investment. The round is expected to be led by Accel, TechCrunch reports, citing a source familiar with the talks. Modal Labs declined to comment.
Valuation could more than triple
If the deal is completed on the terms under discussion, Modal Labs’ valuation will more than triple from $4.65 billion. The company reached that valuation four months ago, when it announced a previous $355 million funding round.
Modal Labs was founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna. The company is based in New York and has about 150 employees, according to TechCrunch’s estimate.
The platform allows developers to train artificial intelligence models and carry out other compute-intensive tasks without managing servers themselves. Modal’s website lists coding startup Cognition, AI music generator Suno, fintech company Ramp, and publishing platform Substack among its customers.
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Growing demand for inference
The talks are taking place amid growing demand for inference services — running an already trained AI model to generate outputs. This demand is growing particularly among customers using open-source models.
Other startups in this segment are also discussing new rounds at higher valuations. According to Bloomberg, Baseten is nearing a capital raise at a $26 billion valuation, double its valuation in June. Meanwhile, according to The Information, Fireworks and Fal have also spoken with investors about new rounds that could substantially increase their valuations.
Despite rapid revenue growth, the margins of such companies remain low because of the high cost of buying or renting computing capacity. In May, Modal told Reuters that its annualized revenue had exceeded $300 million.
