Modal Labs Nears $750M Funding Round at $15.75B Valuation
AI inference infrastructure provider Modal Labs is reportedly close to securing a $750 million funding round led by Accel, valuing the company at $15.75 billion. This valuation would more than triple from its previous $4.65 billion in just four months following a prior $355 million raise. The surge reflects strong demand for AI inference services—where trained models are used to generate outputs—and growing investor interest in startups offering these capabilities. Modal’s rapid growth is part of a broader trend, with other inference-focused companies like Baseten and Fireworks also pursuing significant funding at sharply higher valuations. Despite rising revenue, margins remain thin due to high compute costs. Fireworks recently reported $1 billion in annualized revenue—a fivefold increase from the prior year—and multiple startups are expected to hit similar milestones by year-end. Modal was founded in 2021 and allows developers to train AI models without managing their own servers, serving clients like Cognition, Suno, Ramp, and Substack. The fundraising comes two months after a security incident involving one of its customers’ data being compromised due to an unauthenticated endpoint flaw.
Topics: AI inference infrastructure Modal Labs startups venture capital