THE CRUNCH
Fal, a San Francisco startup that hosts and runs AI video, image and audio models, has raised $1.3 billion in a Series F round led by Bessemer Venture Partners, with participation from Nvidia, Sound Ventures and T. Rowe Price. The deal values the company at $16 billion, double the $8 billion valuation it reached in April, according to Bloomberg. Fal announced its Series E and F rounds together, saying a combined $1.65 billion was raised across both, with Sequoia leading the earlier round.
The funding lands amid surging demand for inference, the process of running an already trained AI model to generate outputs, particularly from customers using open source models. Fal passed $800 million in annualised revenue earlier this year, Bloomberg reported.
Rivals in inference services, including Baseten, Fireworks AI and Modal, have also grown quickly and raised large rounds at higher valuations. But gross margins across the sector remain thin because of the high cost of buying or leasing compute, according to several people familiar with inference companies' financials.
Fal was co-founded in 2021 by Burkay Gur, previously a machine learning leader at Coinbase and an Oracle engineer, and Gorkem Yurtseven, a former Amazon developer.