Modal Labs Nears $750M Round at $15.75B Valuation, Led by Accel

Modal Labs, which supplies infrastructure for running AI inference, is in advanced talks on a $750 million financing led by Accel, according to a person familiar with the deal. The round would value the startup at $15.75 billion on a post-investment basis.

The size of the raise had not been reported previously, although Axios and Bloomberg have published other details of the transaction.

The new valuation would more than triple the $4.65 billion Modal reached when it disclosed a $355 million fundraise just four months earlier.

Demand for inference — the process of running an already-trained AI model to produce outputs — has climbed sharply, particularly among customers using open-source models. Rival providers are also negotiating new capital at substantially higher valuations: Baseten is nearing a round at a $26 billion valuation, double its June level, according to Bloomberg.

Revenue across the sector has grown quickly, but margins remain thin, in large part because buying or leasing compute is still expensive. Fireworks said in July that its annualized revenue had reached $1 billion, five times the prior year's figure, and multiple inference-focused startups are expected to hit that same milestone by the end of the year, the person said.

Modal was founded in 2021 by chief executive Erik Bernhardsson and chief technology officer Akshat Bubna.