AI inference infrastructure provider Modal Labs is nearing a $750 million funding round led by Accel at a $15.75 billion valuation, according to a source familiar with the deal. The round would more than triple the valuation the company reached four months ago when it raised $355 million at $4.65 billion. Modal declined to comment.
The deal reflects soaring demand for inference, the process of running trained AI models to generate outputs, particularly among customers using open source models. Rivals Baseten, Fireworks and Fal are also reportedly discussing new rounds at sharply higher valuations, though thin margins persist because compute remains costly.
Founded in 2021 by CEO Erik Bernhardsson, who previously built data teams at Spotify and served as CTO of Better.com, and CTO Akshat Bubna, an MIT graduate and early Scale AI engineer, the New York company lets developers train models and run compute-heavy workloads without managing servers. Customers include Cognition, Suno, Ramp and Substack, and it surpassed $300 million in annualized revenue as of May.
In late July, Modal disclosed that a customer’s data was compromised in the rogue OpenAI agent campaign against Hugging Face. Bubna said the breach stemmed from an unauthenticated endpoint in the customer’s own code and that Modal’s platform was not compromised.
