Fal.ai, a dev-focused platform for AI-generated audio, video, and images, today revealed that it’s raised $23 million in funding from investors including Andreessen Horowitz (a16z), Black Forest Labs co-founder Robin Rombach, and Perplexity CEO Aravind Srinivas.
It’s a two-round deal. $14 million of Fal’s total came from a Series A tranche led by Kindred Ventures. The remaining $9 million is from a previously-unannounced, a16z-led seed round.
Burkay Gur and Gorkem Yurtseven co-launched Fal (short for “Features and labels”) in 2021. Gur previously worked at Amazon as a software dev, while Yurtseven, an ex-Oracle engineer, led machine learning development at Coinbase for several years.
While hacking together side projects during the pandemic, Gur and Yurtseven, longtime friends, realized the growing demand for AI cloud infrastructure — particularly infrastructure to run generative AI models.
“The big bet was that the nascent space of generative media was about to change all media consumed,” Gur told TechCrunch. “The timing worked out perfectly, because there were some breakthrough models that were released right after Fal started.”
Fal offers two products: privately managed compute and workflows for running models, and APIs for open source models that generate images, audio, and video. Fal was one of the first platforms to host Black Forest Labs’ Flux, the model powering image generation in Grok, X’s controversial chatbot.
Many cloud rivals like CoreWeave provide resources along these same lines. But what makes Fal different is its scalability, Gur argues.
“Our platform can handle hundreds of millions of requests [and our] own inference engine is the most performant,” he said. “Using Fal, you can integrate models into your applications — the product is for enterprises that have media at the core of what they do.”
Whether those claims hold up to scrutiny or not, Fal has managed to grow an impressive customer roster. In addition to Perplexity (which explains Srinivas’ investment) and enterprise customers in the retail and e-commerce sector, popular generative AI apps Photoroom, Freepik, and PlayHT are all paying for Fal’s services, Gur says.
It’s a profitable bunch. A source tells TechCrunch that Fal’s annual run rate has climbed to nearly $10 million (~$800,000 per month), up around 10x from January. The Series A valued the startup at $80 million.
“Fal has reached 500,000 developers on the platform,” Gur said, “generating 50 million images, videos, or audio streams a day.”
Given the many deepfake and misinformation risks around generative technologies, I asked Gur if Fal has moderation policies or filters in place for sensitive content. He said that Fal prefers to take a hands-off approach, leaving the decision whether to implement safety features up to the companies developing models on Fal’s platform.
“For moderation, a lot of what is done happens during training, so we leave that to the companies building the models,” Gur said. “As you might guess, having a very robust program requires more research and resources.”
It’s a bit of an empty answer, given that Fal sponsors some open source training efforts under its research grants program. One would assume that Fal has a say in the development of models it funds.
Gur did suggest, however, that Fal is looking to undertake some de-toxifying efforts itself… at some point. “We do have plans to do more of this in-house, and rely on some vendors specialized in this type of work,” he said.
I asked about IP liability, as well. Should the models on Fal’s platform regurgitate any copyrighted data, will the company protect customers if they’re sued? Gur wouldn’t answer. But the language in Fal’s terms of service imply that customers are on their own.
That’s in contrast to generative AI products from Adobe, Canva, Google, Microsoft, and Shutterstock, all of which have indemnity clauses (albeit with some carve-outs). Vendors like Getty Images, as well as startups such as Fairly Trained, have gone so far as to train models only on “commercially safe” content to avoid the threat of copyright lawsuits altogether.
That’s all to say, those who use Fal assume some risk.
Fal intends to spend the bulk of the capital it’s raised so far on upgrading its inference optimization product to make it self-serve. The company is also establishing a research team that’ll focus on model optimizations and will join Fal’s 17-person staff.
Fal’s other backers include Vercel founder Guillermo Rauch, entrepreneur and investor Balaji Srinivasan, and Hugging Face CTO Julien Chaumond.
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The real estate market and many real estate-focused startups were hit hard when mortgage rates skyrocketed in 2022, but that didn’t stop industry veteran Clelia Warburg Peters from leaving her role as a venture partner at Bain Capital Ventures to launch her own proptech venture firm.
Peters, unlike many other specialist proptech funds, invests in technologies that aim to transform the industry rather than simply serve existing players.
“Things that are purely incremental improvements for the real estate industry are really tough to sell,” Peters told TechCrunch. “The real estate industry is a bad customer of technology. I think we’ve seen that pretty definitively at this point.”
That message resonated with investors, who committed $88 million to the first fund of Peters’ firm, Era Ventures. But her experience was also critical.
Peters’ career in real estate began over 10 years ago when she was asked to manage a family business, one of the largest independent real estate brokerages in the New York City area.
She thought she would spend only six months helping the realty company before returning to her main passion, the tech sector. “I got really sucked into working in real estate, but I was also stunned by the lack of innovation in the space,” Peters said.
In 2014, that realization led her to co-found MetaProp, one of the first specialist firms focused on the real estate. In fact, Peters said she coined the term ‘proptech’ for the emerging tech area.
“At MetaProp, we had exclusively strategic LPs, who were looking as much for strategic insight as they were for financial returns from their investment,” Peters said.
Peters said that most other proptech funds are backed by strategic investors. But she was looking to do something different with Era, whose limited partners include New York Presbyterian Hospital, Continental General Insurance Company, Fenwick & West and her former employer, Bain Capital Ventures.
“I wanted the freedom to invest in [companies] that could be competitors to investors who are strategic LPs for a lot of my peer funds. I also wanted to be very clear that we are investing for what I hope will be top quartile or top decile financial returns,” Peters said. “I think [other] funds in this sector don’t necessarily have this as their North Star.”
Peters credits her experience in Bain and the mentorship she received from veteran fintech investor Matt Harris with learning how to be what she calls a “classic venture investor.”
Era Ventures has already backed 10 startups including HoneyHomes, a subscription service for handymen; Viabot, a robotics company that Peters called a Roomba for parking lots; and TrueHold, a startup that buys homes from seniors and leases them back.
The firm invests in startups from seed to Series B, with the average check ranging from $3 million to $5 million.
In addition to Peters, the firm is run by Raja Ghawi, an experienced construction investor who she brought on as a firm partner.
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Zander Brumbaugh discovered Roblox when he was 12.
Quickly, he went from playing on the platform to creating his own user-generated content and games.
“The games I self-developed have garnered over 500 million visits, with titles peaking at over 80,000 concurrent users,” he told TechCrunch.
Brumbaugh noticed that Roblox still needed developer tools, such as LiveOps, A/B testing capabilities, and effective tools for real-time analytics. And, while serving as a consultant for entertainment studios like Netflix, Paramount, and NBCUniversal he found “they consistently expected standard tooling in the space to make data-informed decisions, and yet none existed.”
“This is where Gamebeast came in,” he said.
Launched late last year, Gamebeast started creating tools in January. It offers a live operations tooling platform that lets developers modify their games without needing to release a new version or interrupt a user’s ongoing game. Gamebeast says it is working with more than 40 game developers and is even in talks with the U.S. military to see how its no-code platform can be of use in defense.
On Wednesday, the startup announced a $3.7 million pre-seed round led by J2 Ventures, with participation from a16z SpeedRun, The Mini Fund, and Spaceport CEO Le Zhang.
Brumbaugh started fundraising for the company after Gamebeast graduated from a16z Games’ accelerator program SpeedRun in March. He then met lead investor J2 Ventures after the team had seen some of its Speedrun Demo Day Materials.
“Gamebeast’s vision for the future of gaming is both innovative and deeply connected to the evolving needs of players,” Christine Keung, General Partner at J2 Ventures, told TechCrunch. “We anticipate that all multiplayer games will be AI-enabled and optimized in real-time, and Gamebeast’s developer platform will push the boundaries of what’s possible.”
There are millions of Roblox developers, millions more monthly users, and hundreds of millions that are paid out to developers to keep users entertained. Naturally, other companies will soon emerge in this space as others seek to capitalize on the market.
Brumbaugh is setting forth on a path of which he’s always dreamed. He’s only 22 and decided from a young age that he wanted to be the first in his family to attend college and push for an advanced degree. He wanted to be a founder and a scientist. He wrote a book about Roblox games, guest lectures about gaming at universities and online, and is completing his master’s degree in computer science at the University of Washington as he still runs the company.
Gamebeast started with a team of four and has 16 employees today. The fresh capital will be used to expand product features for developers as well as extend support to new platforms.
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Investment powerhouse BlackRock is set to launch a massive AI-focused fund, exceeding $30 billion, in collaboration with Microsoft and the Abu Dhabi-backed investment outfit MGX, the FT reported today.
According to the outlet, the fund — among Wall Street’s largest — will focus on creating data centers and funding energy infrastructure to support AI. Chip giant Nvidia is also reportedly contributing its expertise around the already onerous energy demands of AI technologies, which are only expected to grow.
BlackRock is launching the fund with Global Infrastructure Partners (GIP), which BlackRock agreed to acquire for $12.5 billion in a deal back in January. GIP is now BlackRock’s infrastructure investment unit.
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