Fal, a San Francisco-based AI inference startup, raised $1.3 billion in its Series F round led by Bessemer Venture Partners, with participation from Nvidia, Sound Ventures, and T. Rowe Price. The funding values Fal at $16 billion, doubling its $8 billion valuation from April.
The startup announced its Series E and F rounds simultaneously, with a combined $1.65 billion raised across both rounds. Sequoia led the earlier Series E round.
Fal hosts and runs AI video, image, and audio models. The company surpassed $800 million in annualized revenue earlier this year. The latest funding comes as demand for inference services surges. Inference is the process of running a trained AI model to generate outputs, particularly for customers relying on open source models.
Competitors in the inference space include Baseten, Fireworks AI, and Modal, which have also raised large funding rounds at higher valuations. However, gross margins across inference companies remain thin because of high compute costs, according to several people familiar with the companies' financials.
Fal was co-founded in 2021 by Burkay Gur, a former Coinbase machine learning leader and Oracle engineer, and Gorkem Yurtseven, who previously worked as a developer at Amazon.