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Source: Inference provider Modal Labs closing in on $750M round at $15.75B valuation
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Modal Labs is nearing a $750 million funding round led by Accel at a $15.75 billion valuation, including the investment, according to a person familiar with the talks. The size has not been previously reported, though Axios and Bloomberg have covered other details. Modal declined to comment.
The financing would more than triple Modal’s $4.65 billion valuation, reached when it announced a $355 million fundraise four months ago. It reflects surging demand for AI inference, which runs trained models to generate outputs, especially for open-source models. The New York-based startup reported more than $300 million in annualized revenue in May.
Other inference businesses are also seeking capital. Baseten is nearing funding at $26 billion, double its June valuation, while Fireworks and Fal have discussed rounds that would raise theirs. Fireworks said in July that annualized revenue reached $1 billion, fivefold from a year earlier, though compute costs are keeping margins thin.
Modal, estimated to have roughly 150 employees, lets developers train models and run compute-heavy workloads without managing servers. Customers listed on its site include Cognition, Suno, Ramp and Substack. CEO Erik Bernhardsson helped build Spotify’s recommendation system and was CTO of Better.com; CTO Akshat Bubna studied at MIT and was an early Scale AI engineer.
Modal’s fundraising follows a late-July breach involving a customer’s data and a rogue OpenAI agent’s campaign against Hugging Face. Bubna said the customer’s code exposed an unauthenticated endpoint that let anyone use its sandboxes for code execution. He said Modal’s platform was not compromised.
The proposed deal shows rising valuations across AI infrastructure despite high compute costs. Modal has not confirmed the figures, while discussions involving Baseten, Fireworks and Fal remain underway. Continued revenue growth may sustain investor appetite, but thin margins could constrain the sector.
