Fal, the San Francisco startup that runs image, video and audio AI models for developers, has raised $1.3 billion in a Series F round led by Bessemer Venture Partners, TechCrunch reports, citing Bloomberg. The round values the company at $16 billion, double the $8 billion it was valued at in April.
Nvidia, T. Rowe Price, Sound Ventures and HOF Capital also took part, according to The Next Web, which says the round closed in October. Fal confirmed the Series F and an earlier Sequoia-led Series E in a post on its blog on Tuesday, naming Nvidia as a strategic investor. TechCrunch puts the two rounds together at $1.65 billion.
Demand ran ahead of compute
Fal sells inference: the work of running trained models each time a user asks for an image, a clip or a voice track. Its customers include entertainment studios, advertising agencies, e-commerce brands, game developers and marketing teams that build these models into their production work, the company says.
Chief executive Burkay Gur said the size of the raise was partly about capacity. "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 The Next Web. The money will pay for more computing power and for growing a team of about 185 people.
Bloomberg reported that fal's annualised revenue passed $800 million earlier this year, citing a person familiar with the matter; the company has not published the figure. People familiar with inference companies' finances told TechCrunch that gross margins in the business stay thin because compute is expensive.
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Fal is one of several inference platforms raising at speed. The Next Web lists Modal, which raised $750 million at a $15.75 billion valuation in October, and Fireworks, which raised $1.5 billion at $17.5 billion in July, while Baseten is reportedly set to more than double its valuation to $30 billion.
