Fal, a San Francisco-based company that hosts and runs AI models for video, images and audio, has raised $1.3 billion in a funding round led by Bessemer Venture Partners. The deal values the startup at $16 billion, twice its $8 billion valuation in April, according to Bloomberg. Nvidia, Sound Ventures and T. Rowe Price also participated.
Fal announced its Series E and Series F rounds together, saying it raised a combined $1.65 billion across both. Sequoia led the earlier round, while the latest funding is the Series F.
The raise comes as demand for AI inference services increases. Inference is the process of using a trained model to generate outputs, and demand has been particularly strong from customers using open-source models. Fal surpassed $800 million in annualized revenue earlier this year, Bloomberg reported.
Other inference providers, including Baseten, Fireworks AI and Modal, have also expanded rapidly and secured large funding rounds at higher valuations. However, gross margins in the sector remain thin, according to people familiar with the companies’ finances, because of the high cost of buying or leasing computing capacity.
Fal was founded in 2021 by Burkay Gur, a former machine-learning leader at Coinbase and an Oracle engineer, and Gorkem Yurtseven, formerly a developer at Amazon.
Sources: TechCrunch Startups.