AI inference startup Fal raises $1.3 billion, doubling its valuation to $16 billion
Fal, which runs image, video and audio generation models for developers, raised $1.3 billion in a Series F round led by Bessemer Venture Partners at a $16 billion valuation, double the $8 billion it was valued at in April.
Fal, a San Francisco-based startup that hosts and runs generative AI models for images, video and audio, said on Tuesday, November 3, that it has raised $1.3 billion in a Series F round led by Bessemer Venture Partners. The deal values the company at $16 billion, double its $8 billion valuation in April, Bloomberg reported. Nvidia, Sound Ventures, HOF Capital and T. Rowe Price also took part.
Inference demand surges
Fal gives developers access to a wide range of generative media models through a single API, and its customers include entertainment studios, advertising agencies and game developers. TechCrunch noted that the round comes amid soaring demand for inference, the process of running already-trained models to produce outputs, particularly from customers relying on open-source models.
Co-founder and CEO Burkay Gur told Bloomberg the round is so large because demand has surged and serving it takes more compute. "We hit a point in summer where we were not able to serve our customers and had to rate-limit them," he said, according to SiliconANGLE. The money will go to computing capacity and hiring beyond the company's current 185 employees. Gur said pretraining a model of Fal's own is not on the near-term agenda, though he did not rule it out.
The numbers
Fal's annualized revenue passed $800 million earlier this year, Bloomberg reported. The company also disclosed its April Series E, led by Sequoia Capital, which raised $350 million; together the two rounds total $1.65 billion, bringing total investment in the company to more than $1.9 billion. Nvidia was described as a strategic investor, and Bessemer partner Talia Goldberg is joining the board.
The new valuation puts Fal just behind rival Fireworks AI, which raised $1.5 billion at a $17.5 billion valuation in July. Other inference providers such as Baseten and Modal are also growing fast, but people familiar with the sector's finances told TechCrunch that gross margins remain thin because compute is expensive to buy or lease.
Fal was founded in 2021 by Gur, a former machine learning lead at Coinbase, and CTO Gorkem Yurtseven, previously a developer at Amazon.
Sources: TechCrunch, SiliconANGLE, Bloomberg
Get the latest news delivered to your inbox.
Related articles
