Fal has raised $1.3 billion in a funding round led by Bessemer Venture Partners, according to Bloomberg. The deal values the San Francisco startup at $16 billion, twice its $8 billion valuation in April. Nvidia, Sound Ventures, and T. Rowe Price also participated.
Fal hosts and runs AI models that generate video, images, and audio. Its latest financing is a Series F round. The company announced it alongside an earlier Series E round led by Sequoia. Together, the two rounds raised $1.65 billion.
The funding comes as demand grows for inference services, particularly among customers using open source models. Inference is the process of running a trained AI model to produce an output. Fal passed $800 million in annualized revenue earlier this year, Bloomberg reported.
Other inference providers face thin gross margins
Other inference providers are attracting funding at higher valuations as they grow. They include Baseten, Fireworks AI, and Modal. But several people familiar with inference companies’ finances said their gross margins remain thin because buying or leasing computing capacity is expensive.
Fal was founded in 2021 by Burkay Gur and Gorkem Yurtseven. Gur previously led machine learning work at Coinbase and worked as an engineer at Oracle. Yurtseven was a developer at Amazon.
Fal’s latest disclosed financing is the $1.3 billion Series F round, which the company announced together with its Series E.
