Modal in talks to raise at $15B, tripling valuation in four months
What's the deal? Modal, the AI infrastructure startup, is in talks to raise a Series D round at US$9.71B valuation, BloombergDealroom has a profile for this one. Try Dealroom → reported, citing sources familiar with the negotiations. The deal would nearly triple the company's valuation in four months.
Why now? Modal raised $355 million at US$3.01B valuation in May, up from $1.1 billion the previous autumn. Its total funding since 2021 stands at around $465 million.
What's the endgame? Founded in January 2021 by Erik Bernhardsson and Akshat Bubna, Modal built its own file system, container runtime, and scheduler so customers can access GPUs in under a second. It charges for GPU and CPU time by the second, and is seeing growing demand for its Sandboxes product, which lets AI coding agents write, run, and test code in isolated environments.
Bernhardsson spent 15 years on recommendation systems at Spotify and led engineering at Better.comDealroom has a profile for this one. Try Dealroom → before starting the company. Modal is headquartered in New York, with engineering teams in San Francisco and Stockholm, and had over 120 employees when it last raised funds.
By the numbers: Modal's annualised revenue reached $300 million by April, up from about $119 million at the end of 2025 — a fivefold increase in six months. Most of that growth came from AI coding tools that generate code needing to be run.
What could go wrong? Revenue is up fivefold in six months while the valuation could triple over four — meaning the two figures are not rising at the same rate. GPU supply also remains limited, so margins could be squeezed once supply catches up with demand.
The signal: Investors are chasing inference, the process by which a trained model responds to prompts, which now accounts for around two-thirds of AI computing demand, up from one-third in 2023. The inference market is forecast to reach $103.7 billion this year and $312.6 billion by 2034 — and rivals are raising accordingly, from Together AIDealroom has a profile for this one. Try Dealroom →'US$586.7M round at an $8.3 billion valuation to Baseten's reported talks to double its worth to $26 billion.
Read more: Tech Funding News
Image credit: Modal
