San Francisco-based Fal, a startup that hosts and operates AI video, image and audio models, has secured $1.3 billion in its latest funding round. The Series F round was led by Bessemer Venture Partners, with participation from Nvidia, Sound Ventures, and T. Rowe Price. After the deal, Fal’s valuation stands at $16 billion, double the $8 billion valuation reported in April, according to Bloomberg.
Series E and F announced together
The company announced its Series E and Series F rounds simultaneously and said that $1.65 billion was raised in total across both rounds. The earlier Series E round was led by Sequoia.
Why it matters: rising demand for inference services
The Series F comes amid surging demand for inference services — the process of running an already-trained AI model to generate outputs — particularly from customers using open-source models. Bloomberg noted that Fal surpassed $800 million in annualized revenue earlier this year.
Other providers of inference services, including Baseten, Fireworks AI, and Modal, have also been growing quickly and closing large funding rounds at higher valuations. However, several people familiar with the finances of inference companies say gross margins remain thin because of the high cost of purchasing or leasing compute.
Founders and background
Fal was co-founded in 2021 by Burkay Gur, formerly a machine learning lead at Coinbase and an Oracle engineer, and Gorkem Yurtseven, previously a developer at Amazon.
Key figures and timeline
- Latest financing: $1.3 billion (Series F), led by Bessemer Venture Partners; participants include Nvidia, Sound Ventures, T. Rowe Price.
- Total raised across Series E & F: $1.65 billion (Series E led earlier by Sequoia).
- Current valuation: $16 billion (April valuation: $8 billion).
- Annualized revenue: exceeded $800 million earlier this year.
The financing reflects strong market demand for inference services, while the sector continues to contend with pressure on margins due to the high cost of compute.
