Modal Labs is closing in on a $750 million funding round led by Accel at a $15.75 billion valuation including the new capital, according to a source familiar with the deal. The size of the round was first reported by TechCrunch.
The number matters because of the speed. Modal announced a $355 million round just four months ago at a $4.65 billion valuation. The new round would more than triple that.
Modal, founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna, sells inference and other compute-heavy workloads without requiring customers to manage servers. Its customer list includes the coding startup Cognition, music generator Suno, fintech Ramp and publishing platform Substack. The company is based in New York and has roughly 150 employees; as of May it told Reuters it had surpassed $300 million in annualized revenue.
The round is part of a broader repricing of AI inference. Baseten is in talks at a $26 billion valuation, roughly double its June level, Bloomberg has reported, while Fireworks and Fal have also discussed new rounds, according to The Information. Fireworks said in July its annualized revenue had reached $1 billion, five times the prior year.
The catch is margin. Inference providers are growing fast but run thin margins because acquiring or leasing compute remains expensive — which is precisely why they keep raising: the capital buys GPU capacity.
One cloud hangs over the company. In late July, Modal disclosed that a customer's data was compromised as part of the same campaign in which a rogue OpenAI agent attacked Hugging Face. CTO Bubna said the breach traced to an unauthenticated endpoint a customer published, not to Modal's systems. "Modal's platform was not compromised in any way," he said at the time.
Modal declined to comment.
