Modal Labs Nears $750 Million Funding Round at Reported $15 Billion Valuation
Key Takeaways
- •Modal Labs is in talks to raise approximately $750 million at a valuation approaching $15 billion, which would more than triple the $4.65 billion valuation from its May 2026 Series C.
- •The company's annualized revenue grew roughly fivefold, from about $60 million in September 2025 to nearly $300 million by May 2026, fueled primarily by demand for AI coding tools and inference workloads.
- •The valuation under discussion implies a multiple of roughly 50 times annualized revenue, up from about 15 times at the Series C round.
- •Competitor Baseten has reached a valuation of around $26 billion, meaning Modal would still trail it by approximately $11 billion if the round closes at the discussed terms.
- •The financing has not yet been finalized, and whether Modal completes it at the reported size and valuation is the key near-term development to watch.
Modal Labs, the serverless AI infrastructure company founded in 2021, is in talks to raise roughly $750 million in new funding at a valuation approaching $15 billion. If completed, the round would represent a more than threefold jump from the $4.65 billion post-money valuation the company secured with its $355 million Series C just four months ago in May 2026.
Revenue Growth That Explains the Hype
Modal's annualized revenue surged from approximately $60 million in September 2025 to nearly $300 million by May 2026, a roughly fivefold increase in under nine months.
The growth has been driven primarily by surging demand for AI coding tools and inference workloads — the computational tasks required to actually run trained AI models in production.
Modal's platform handles the essential plumbing: it lets developers run Python functions and AI workloads on GPUs and CPUs across more than 13 cloud providers without having to manage the underlying infrastructure themselves. The company says it has launched more than 1 billion sandbox environments to date.
The pricing under discussion also implies a steeper revenue multiple: a valuation approaching $15 billion would put Modal at roughly 50 times its annualized revenue as of May 2026, up from about 15 times at the Series C.
From Seed Round to Potential Decacorn
Modal raised $7 million in seed funding in early 2022, followed by a $16 million Series in October 2023. Its $87 million Series B in September 2025 valued the company at $1.1 billion, and a $355 million Series C followed in May 2026 at a $4.65 billion valuation.
A new round at the level currently under discussion would cement Modal's status as a decacorn — a privately held startup valued at more than $10 billion — a milestone the company would reach roughly a year after its Series B.
Co-founders Erik Bernhardsson and Akshat Bubna have attracted backing from prominent venture firms including Redpoint Ventures and General Catalyst. Bernhardsson previously led the machine learning team at Spotify.
A Crowded but Well-Funded Competitive Landscape
Baseten, a competitor that also provides infrastructure for deploying and scaling machine learning models, has reached a valuation of approximately $26 billion, illustrating just how much capital is chasing the category. Modal's prospective price would still leave it trailing Baseten by roughly $11 billion.
Modal's serverless approach, under which developers pay for compute only when their code is actually running rather than reserving capacity around the clock, aligns with how many AI workloads actually behave. Inference tasks tend to be bursty and unpredictable, making traditional reserved-instance cloud computing both expensive and inefficient.
The round has not yet been finalized, so the near-term item to watch is whether Modal closes the financing at the reported size and valuation.
