Fal raises $1.3B Series F at $16B valuation as inference demand grows

Fal, a San Francisco startup that hosts and runs AI video, image and audio models, has raised $1.3 billion in a Series F led by Bessemer Venture Partners. The round included participation from Nvidia, Sound Ventures and T. Rowe Price. It values the company at $16 billion, double the $8 billion valuation it carried in April, according to Bloomberg, which TechCrunch cited.

Fal announced its Series E and Series F rounds together and said they raised a combined $1.65 billion. Sequoia led the earlier Series E.

The raise comes amid rising demand for inference. TechCrunch described inference as the process of running an AI model that has already been trained to generate outputs. The demand is particularly strong from customers who rely on open source models. Bloomberg's report, as TechCrunch relayed it, said Fal surpassed $800 million in annualized revenue earlier this year.

Fal is not alone in this market. TechCrunch noted that other inference providers, including Baseten, Fireworks AI and Modal, have been growing quickly and raising large rounds at higher valuations. Their gross margins remain thin, however, because buying or leasing compute is expensive. That point comes from several people familiar with inference companies' financials, who were not named, so it describes the sector rather than Fal's own accounts.

Fal's own announcement frames the money as a way to fund inference capacity and its team. It says entertainment studios, advertising agencies, e-commerce brands, game developers and marketing teams now run image, video and audio models, including Fal's own, inside production pipelines that deliver final work. The company's post says the Series E was led by Sequoia Capital and the Series F by Bessemer, with continued investment from NVIDIA.

Fal was co-founded in 2021 by Burkay Gur, a former machine learning leader at Coinbase and an Oracle engineer, and Gorkem Yurtseven, who was previously a developer at Amazon.