Sources: Multimodal AI startup Fal.ai already raised at $4B+ valuation

Fal.ai, an innovative startup specializing in hosting AI models for images, videos, and audio, has successfully secured a new funding round that lifts its valuation to over $4 billion. According to sources close to the deal, the company raised around $250 million.

Prominent investors in this funding round include industry giants Kleiner Perkins and Sequoia. Fal did not provide a comment on the fundraising, and both Sequoia and Kleiner Perkins opted not to share any insights.

This new funding arrives less than three months after Fal announced a remarkable $125 million Series C round at a valuation of $1.5 billion, led by Meritech. At that time, the company reported revenues exceeding $95 million and garnered a user base of over two million developers, as noted by Todd Jackson, a partner at First Round Capital, on LinkedIn. This marked an astonishing growth trajectory compared to the previous year, when TechCrunch reported Fal generated $10 million in annual recurring revenue (ARR) with a developer base of just 500,000.

Fal’s success is closely linked to the soaring demand for multimodal AI applications, particularly in the realm of video. The rapid ascent of OpenAI’s Sora, which quickly climbed to the top of the U.S. App Store even outpacing ChatGPT, highlights the significant market opportunity for Fal’s services.

Fal offers developers access to over 600 models spanning images, videos, audio, and 3D content. With a robust cloud infrastructure powered by thousands of Nvidia H100 and H200 GPUs optimized for quick inference, the company also provides customizable tools and various access options, including API connectivity, a flexible serverless setup, and enterprise-grade compute clusters. Although other well-known competitors in model and app hosting—including Microsoft and Google—exist, Fal’s distinct emphasis on media and multimodal capabilities sets it apart, according to venture capitalists like Jackson.

Fal’s clientele is diverse, ranging from individual developers to major corporations such as Adobe, Canva, Perplexity, and Shopify. Their offerings are particularly valuable for creating media content in advertising, e-commerce, and gaming.

Founded in 2021 by Burkay Gur, a former machine learning leader at Coinbase, and Gorkem Yurtseven, a veteran developer from Amazon, Fal.ai emerged from the duo’s vision for personalized multimedia generation. While other tech innovators focused on large language models (LLMs), Gur and Yurtseven dedicated themselves to optimizing Stable Diffusion for speed and scalability, subsequently branching out to host a variety of other AI models.

To date, Fal has raised nearly $200 million, per PitchBook data, with existing investors comprising renowned firms such as Bessemer Venture Partners, Kindred Ventures, Andreessen Horowitz, Notable Capital, First Round Capital, Unusual Ventures, and Village Global.