Fal, a San Francisco-based startup that hosts and runs AI video, image, and audio models, has raised $1.3 billion in its latest funding round led by Bessemer Venture Partners with participation from Nvidia, Sound Ventures, and T. Rowe Price. The deal values Fal at $16 billion, double the company’s valuation of $8 billion in April, Bloomberg reported.
The company announced its Series E and F rounds at the same time, saying both raised a total of $1.65 billion. (Sequoia led in the early rounds.)
The latest round (Series F) comes amid a surge in demand for its inference service, a process that runs AI models that have already been trained to produce output, especially from customers who rely on open source models. Fal surpassed $800 million in annual revenue earlier this year, according to a Bloomberg report.
Companies that provide inference services, such as Baseten, Fireworks AI, and Modal, are also growing rapidly and raising significant funding at higher valuations. But gross profit margins remain thin because of the high costs of buying and leasing computing, according to several people familiar with the inference company’s finances.
Fal was co-founded in 2021 by Burkay Gur, a former Coinbase machine learning lead and Oracle engineer, and Gorkem Yurtseven, a former Amazon developer.
