Modal AI infrastructure valuation hits $15 billion after Series C

Modal Labs closed a $355 million Series C funding round led by Accel, tripling its valuation to over $15 billion. The AI infrastructure provider's annualized revenue run rate has also more than tripled, surging from about $300 million in May to exceed $1 billion.

The latest investment values Modal at $15.75 billion, which is more than three times its $4.65 billion valuation from a funding round just five months earlier. Since that May round, the company's platform usage has tripled. Overall, the business has grown more than 15-fold year-on-year. The valuation represents a more than 14-fold increase since September 2025, when Modal was worth $1.1 billion.

Platform capabilities and revenue drivers

Modal provides a platform for production AI, offering cloud infrastructure for teams that develop, train, and serve AI applications at scale. Its offerings include inference, training, sandboxes, and functions. Companies use the platform to move applications from experimentation to production, build AI agents, generate lifelike video, train robots, and run drug discovery simulations.

A key revenue driver is Sandboxes, a cloud service for hosted containers optimized for AI workloads that launched in 2023. This product alone reached a $300 million annualized run rate and accounts for nearly one-third of Modal’s total revenue. The service can provision tens of thousands of containers per second. In an internal test, Modal ran one million concurrent containers, and the platform can support up to one million Sandboxes running simultaneously. To date, Modal has launched nearly three billion Sandboxes environments.

Growth and market positioning

Usage and revenue have grown more than 15-fold year-on-year since the Series C announcement. Accel stated that AI infrastructure for training, serving, and running AI is the fastest-growing technology market, an industry still in its early stages of development.

Modal's custom scheduler parallelizes container requests across multiple servers. Its Sandboxes may include a sidecar container with auxiliary software, such as a hallucination-detection tool; these sidecars run on the same physical server to reduce latency. Another feature, Secret Injection, lets AI agents use external application credentials without exposing them.

For AI training, Modal's service lets developers spin up graphics-card clusters with simple scripts. These clusters use RDMA, a network protocol that shortens packet routes to speed up traffic. In the inference market, Modal competes with services for deploying AI models on hosted infrastructure. It also offers a library of open-source algorithms for enterprises that do not want to build their own models.

Expansion and future plans

The five-year-old company, founded in 2021 by Akshat Bubna and Erik Bernhardsson, has expanded its workforce from around 70 employees to more than 200. Employees are located in New York, San Francisco, and Stockholm. Modal's infrastructure is used by clients including DoorDash, Cognition, Ramp, Runway, Physical Intelligence, Generalist AI, and 1X.

Modal's services run on hardware rented from more than 20 cloud providers, a strategy that enables workload migration if a provider has issues. The latest funding round saw participation from Kleiner Perkins as a new investor, alongside about six existing backers including Menlo Ventures, General Catalyst, Redpoint, Lux Capital, and Bain Capital Ventures.

Modal plans to invest part of the new $355 million in product development, specifically to build services for reinforcement learning and post-training.