Fal, a San Francisco startup that runs image, video and audio generation models for software developers, raised $1.3 billion in new funding at a $16 billion valuation, doubling its value in roughly six months as demand for AI-generated media strains available computing power.
Bessemer Venture Partners led the Series F round, the company said Tuesday, with Nvidia Corp., Sound Ventures, HOF Capital and T. Rowe Price also participating. Bessemer partner Talia Goldberg, who has backed the company since its Series B, will join the board of Features & Labels Inc., as fal is formally known.
Paying for compute
Fal also disclosed a previously unannounced $350 million Series E led by Sequoia Capital in April at an $8 billion valuation, bringing the two rounds to $1.65 billion. The company was valued at about $4.5 billion last December and has now raised more than $1.9 billion in total.
Chief Executive Burkay Gur has said most of the new money will go to computing capacity after demand this summer grew faster than fal could serve, forcing it to limit some customers’ usage. Annualized revenue topped $800 million earlier this year, according to a person familiar with the company’s finances. Fal has about 185 employees and plans to hire more.
A crowded, thin-margin field
Fal gives developers access to hundreds of open and proprietary media models through a single interface and has begun post-training some of them to run faster, sometimes sharing revenue with the labs that built them. Bessemer said customers include Adobe, Canva, Shopify and Amazon.
The valuation puts fal just below rival inference provider Fireworks AI, which raised $1.5 billion at a $17.5 billion valuation in July. Investors and operators say gross margins across the sector remain slim because the specialized chips the companies rent or buy are expensive, leaving fund-raising as the main way to keep pace with demand.
