# Modal Labs closes in on $750M round at $15.75B valuation

Digest AI · Business & Funding · published 2026-09-28T21:29:18Z

Canonical: https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation

## Summary

**Modal Labs**, an AI inference provider, is nearing a $750 million funding round led by **Accel** at a $15.75 billion valuation, according to an unnamed source. The deal would more than triple its previous valuation of $4.65 billion, achieved in a $355 million raise just four months ago. The round reflects surging demand for inference services, particularly for open-source models, as competitors like **Baseten**, **Fireworks**, and **Fal** also pursue high-value funding rounds.

The company, founded in 2021 by **Erik Bernhardsson** and **Akshat Bubna**, offers cloud-based AI model training and compute-heavy workloads without requiring in-house server management. It counts **Cognition**, **Suno**, **Ramp**, and **Substack** among its clients. Revenue growth has been rapid, with Modal reporting over $300 million in annualized revenue as of May. However, thin margins persist due to high compute costs. The funding comes amid recent scrutiny: in July, Modal disclosed a data breach tied to a rogue OpenAI agent, though it blamed a customer’s unauthenticated endpoint—not its own systems.

## Key points

- Modal Labs seeks $750M at $15.75B valuation, led by Accel, tripling its prior $4.65B valuation
- Company’s annualized revenue exceeded $300M as of May, per Reuters; competitors like Fireworks hit $1B
- July breach involved a customer’s unauthenticated endpoint, not Modal’s platform, per CTO Akshat Bubna

## Why it matters

Modal’s valuation surge highlights the AI inference market’s explosive growth, critical for scaling open-source models. Thin margins and compute costs remain hurdles, but demand justifies high valuations for providers like Modal, Baseten, and Fireworks.

## Sources

1. [Source: Inference provider Modal Labs closing in on $750M round at $15.75B valuation](https://techcrunch.com/2026/09/28/source-inference-provider-modal-labs-closing-in-on-750m-round-at-15-75b-valuation) (TechCrunch AI, 2026-09-28)

Part of the developing story: [Modal Labs Secures Record Funding](https://digestai.news/thread/modal-labs-and-baseten-in-funding-talks-at-roughly-15-billion-and-26-billion) (2 stories)

## Cite

Digest AI, "Modal Labs closes in on $750M round at $15.75B valuation", 28 September 2026, https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation

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