Modal labs nears $750m funding round at $15.75B valuation

AI inference infrastructure provider Modal Labs is close to securing a $750 million funding round led by Accel, valuing the company at $15.75 billion, according to a source. This would more than triple Modal’s valuation from its $4.65 billion valuation following its $355 million raise four months ago. The deal comes amid rising demand for inference services, particularly from customers using open-source models. Other inference startups, such as Baseten, Fireworks, and Fal, are also in talks for significant capital raises. Modal, founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna, lets developers run compute-heavy workloads without managing servers. The company, based in New York with about 150 employees, serves clients like Cognition, Suno, Ramp, and Substack. Revenue has grown rapidly, with Fireworks hitting $1 billion in annualized revenue in July, and multiple startups expected to reach similar milestones by year-end. Bubna noted a recent breach was due to a customer’s code flaw, not Modal’s systems.