AI infra startup Modal raises $750 mn at $15.7 bn valuation

Modal co-founders (L-R) Erik Bernhardsson and Akshat Bubna BENGALURU: AI infrastructure startup Modal Labs, co-founded by Delhi-raised computer scientist and Olympiad gold medallist Akshat Bubna, has raised $750 million that values the company at $15.7 billion. The fundraise comes as the five-year-old company crossed $1 billion in annualised revenue run rate, fuelled by growing demand for infrastructure that powers AI applications.The latest valuation is more than three times the $4.6 billion Modal was valued at in May this year, when it raised $355 million in a Series C round. The company’s valuation has risen more than 14-fold since September 2025, when it was worth $1.1 billion.Accel led the latest round, with Kleiner Perkins joining as an investor. Existing backers Menlo Ventures, General Catalyst, Redpoint, Lux Capital and Bain Capital Ventures also participated, the company said on Wednesday.Modal said usage of its platform had tripled in the five months since its previous funding round, while the business had grown more than 15-fold year-on-year. Its annualised run rate, which reflects the pace of revenue extrapolated over a year rather than revenue earned in the preceding 12 months, has climbed from about $300 million in May to over $1 billion.Founded in 2021 by Bubna and Swedish engineer Erik Bernhardsson, Modal provides computing infrastructure that allows companies to develop, run and scale AI applications without having to manage their own servers or computing hardware. Its platform now draws capacity from more than 20 cloud providers, allowing developers to access computing power as demand rises or falls.One of Modal’s fastest-growing businesses is Sandboxes, a product that allows AI agents to execute code in isolated environments. Launched in 2023, the product alone has reached a $300 million annualised run rate, the company said. Modal claims it has launched nearly three billion such environments to date and can support up to one million running simultaneously.The surge reflects growing adoption of AI coding agents, which need computing environments to execute programs, test results and carry out tasks. Modal said its infrastructure is used by companies including DoorDash, Cognition, Ramp and Runway, as well as robotics firms Physical Intelligence, Generalist AI and 1X.Modal is also expanding its products for AI model training and inference, the process of running trained models to generate outputs. Its latest launches include tools for training models across multiple machines and new capabilities for running AI applications.Bubna, who became the first Indian student to win gold at the International Olympiad in Informatics in 2014, previously told TOI that conventional cloud infrastructure was not designed for the demands of modern AI.In an interview last year, Bubna explained that Modal’s approach was to build its own software systems rather than depend on tools originally created for older computing applications. “One of the things programming competitions teach you is that most things are pretty solvable. You get used to solving harder problems,” he said at the time.The company has also expanded its workforce sharply. Modal had around 70 employees when Bubna spoke to TOI last year. It now employs more than 200 people across New York, San Francisco and Stockholm.You use AI every day. Now get your AI Quotient. Take the AIQ test.