GPU compute and deployment platform Modal is in talks for a new funding round. According to The Information, the company is targeting a valuation of roughly $4.5 billion — an 80% premium over its last round just a few months ago — and plans to raise between $150 million and $250 million. Existing investors Accel and Redpoint Ventures are participating.
The sky-high valuation is backed by a massive revenue jump. Modal's annualized revenue has hit about $300 million, which is five times what it was last fall.
Much of that growth is fueled by demand for AI agent sandboxes — isolated software environments where agents can safely execute code without messing up the main system. With companies like Ramp and Lovable using sandboxes heavily to develop and reinforce their agents, Modal is riding the application-layer wave.
But there's a catch. As OpenAI and other big players gobble up GPU capacity, driving up spot prices, Modal — which rents GPUs from major cloud providers and resells them to developers — is likely to see its margins squeezed.