San Francisco-based Fal has raised $1.3 billion in a Series F funding round led by Bessemer Venture Partners, valuing the company at $16 billion. The deal, which closed in October, doubles its $8 billion valuation from April. Nvidia, T. Rowe Price, Sound Ventures, and HOF Capital also participated.
Fal announced its Series E and Series F rounds together, reporting combined proceeds of $1.65 billion. Sequoia led the earlier round. The company hosts image, video, and audio models for developers, providing inference: the process of running models after training to generate outputs.
Demand has surged, particularly among customers using open-source models. Fal surpassed $800 million in annualized revenue earlier this year, a measure that expresses its revenue pace on a yearly basis rather than reporting a completed year's sales. Chief executive Burkay Gur said summer demand overwhelmed the company's ability to serve customers, forcing it to impose usage limits.
The new capital will support additional computing capacity and expansion of Fal's 185-person workforce. The company has also begun fine-tuning video models with their developers, sometimes in exchange for licensing fees or a revenue share. Gur co-founded Fal in 2021 with former Amazon developer Gorkem Yurtseven.
Separately, rival Modal raised $750 million at a $15.75 billion valuation in October, while Fireworks raised $1.5 billion at a $17.5 billion valuation in July. Despite rapid growth and substantial investment across the inference sector, gross margins remain thin because purchasing or leasing computing resources is expensive.
