Modal Labs Nears $750M Round at $15.75B Valuation

AI inference infrastructure provider Modal Labs is nearing a $750 million funding round led by Accel at a $15.75 billion valuation that includes the investment, according to a source with knowledge of the funding. While Axios and Bloomberg have reported other deal details, the size of this funding round has not been previously reported.

The new round would more than triple Modal’s valuation from the $4.65 billion it reached when it announced its $355 million previous fundraise just four months ago, underscoring the rapid expansion of the sector.

Stock photo for illustration only, not from the actual event

The deal comes amid soaring demand for inference services, the process of running a trained AI model to generate outputs, particularly for customers relying on open-source models. Other inference startups are also in talks to raise fresh capital at much higher valuations, including Baseten nearing a $26 billion valuation, alongside Fireworks and Fal.

Although revenue for these companies has been growing rapidly, their margins remain thin due to high compute acquisition and leasing costs. Fireworks announced in July that its annualized revenue hit $1 billion, and multiple inference startups are expected to reach the same milestone by year's end.