An AI Startup's New Funding Round Could Value It at $8 Billion — With Two Different Price Tags

Three months ago, a Sequoia Capital-led funding round valued Fal at $4.5 billion. The company is now in talks to raise between $300 million and $350 million at a valuation of around $8 billion, according to a person with direct knowledge of the fundraise, as first reported by The Information.

Fal builds cloud infrastructure that lets developers run AI models generating images, video, and audio. Its annualised revenue recently reached $400 million, up from $200 million in October, according to The Information. 

The company charges developers based on usage, including per second of video output, and serves three million developers, including at Adobe, Canva, and Shopify. Investors include Andreessen Horowitz, Notable Capital, Meritech Capital, and Kindred Ventures. Which firm is leading the new round is not yet known.

The round is not being raised as a single transaction at one price.

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One Round, Two Different Prices

Fal is splitting the fundraising into two instalments, each priced at a different valuation. The higher-priced instalment carries the $8 billion figure. The other is priced below that.