Modal Labs raises $750m after opening London office

Modal Labs secures $750m at a $15.75bn valuation

Modal Labs has raised $750m in Series D funding following the opening of its London office, BusinessCloud reports. Accel led the investment, which gives the AI infrastructure company a post-money valuation of $15.75bn.

Kleiner Perkins also invested, alongside every existing Modal investor. BusinessCloud named Menlo Ventures, General Catalyst, Redpoint, Lux Capital and Bain Capital Ventures among the returning backers.

The financing comes with a sharp increase in activity on the platform. Founder Erik Bernhardsson said usage had trebled in the five months since Modal announced its Series C, while year-on-year growth had exceeded fifteenfold, according to BusinessCloud. He also reported that the business had passed $1bn in annualised run rate. That measure describes an annualised pace of business, rather than a completed year’s result.

A New York platform adds to its Stockholm presence

Modal Labs provides infrastructure that lets developers run artificial intelligence and machine-learning workloads without taking responsibility for physical servers. Its proposition is to remove that operational burden from teams building and running AI applications, BusinessCloud reports.

The company is headquartered in New York and already has a Stockholm base, making London its second European location. Bernhardsson is Swedish and began his career at Spotify, according to BusinessCloud.

Modal is pursuing both startup and enterprise customers. That gives its European operation a remit spanning younger businesses developing AI products and larger organisations adopting the technology, rather than a launch focused on one customer segment.

Bernhardsson points to London’s AI strength and local requirements

Explaining the location decision, Bernhardsson described London as Europe’s leading AI centre, according to comments reported by BusinessCloud. His assessment puts the city’s technology ecosystem at the centre of Modal’s case for establishing the office; it is the founder’s view, rather than an independently established ranking.

Bernhardsson also said European customers can have requirements that differ from those of US companies, particularly around local regulation. His stated rationale therefore extends beyond selling the same service in another geography: the European push is intended to account for differences in what customers need.

On the wider infrastructure market, Bernhardsson argued that AI has made new categories of software possible and that existing technology stacks are not always suited to them. BusinessCloud reported his position that these applications require different infrastructure components and approaches. That is the commercial thesis behind Modal’s focus on developers running AI workloads.

London recruitment starts with commercial teams

Hugh Killingbeck-Jones has joined Modal as vice-president for EMEA to build the London teams, BusinessCloud reports. Recruitment covers sales, solutions engineering, partnerships and marketing, giving the office responsibilities across customer acquisition, technical engagement and business relationships.

Bernhardsson expects engineering and other functions to join the London operation over time. The reported plan sets out a broader role for the office beyond its initial commercial recruitment, but provides no timetable or hiring target for that development.

For companies assessing Modal’s European expansion, the distinction is between announced recruitment and future ambitions. BusinessCloud’s report does not specify how much of the $750m will be allocated to London or the wider region, so the funding round should not be treated as a disclosed European spending commitment.