Modal Labs, a New York-headquartered startup that rents out cloud computing power for artificial intelligence, has closed a $355 million Series C funding round at a $4.65 billion valuation — one of the largest venture deals to come out of the New York tech scene in 2026. The company announced the round on May 21, 2026.

The round

The financing was led by General Catalyst and Redpoint, with new investors Menlo Ventures, Bain Capital Ventures and Accel joining alongside Modal’s existing backers, according to the company and reports from SiliconANGLE and Data Center Dynamics.

The deal came together in two tranches. An initial group of investors committed at a $2.5 billion valuation; surging investor interest then drove a second tranche at the higher $4.65 billion mark — a sign of how aggressively capital is chasing AI infrastructure.

What Modal does

Modal sells what the industry calls serverless compute. Rather than provisioning and managing servers, AI developers use Modal to spin up access to GPUs — the specialized chips that run AI models — on demand, paying for what they use. The company also offers a “sandbox” product that lets developers safely run and test AI-generated code before pushing it into production, an increasingly important need as companies deploy code written by AI agents.

The company is led by co-founders Erik Bernhardsson, who serves as chief executive, and Akshat Bubna, chief technology officer. Bernhardsson previously spent years at Spotify building its music-recommendation system and later served as chief technology officer at the mortgage startup Better.com. Bubna was an early engineer at Scale AI. Modal was founded in 2021.

The growth story

Modal’s valuation rests on a steep revenue ramp. The company said its annualized revenue has surpassed $300 million, up from roughly $60 million in September — a roughly fivefold increase in about eight months. Modal attributes the surge to demand for GPU access and AI development tools, and said its sandbox product now drives more than a third of revenue. The company employs more than 120 people.

Those figures put Modal among a small group of AI-infrastructure startups whose revenue has scaled fast enough to justify multibillion-dollar valuations, as enterprises race to build and run AI applications without standing up their own data centers.

New York’s AI moment

Modal’s raise is a marquee data point for a New York tech ecosystem that remains the second-largest venture market in the United States by deal volume, behind only the San Francisco Bay Area. Industry tracker AlleyWatch counted 21 New York companies raising $50 million or more in the first quarter of 2026 alone.

May 2026 was a heavy month for New York deals: alongside Modal’s Series C, AlleyWatch noted $100 million health-care rounds for Nourish and Garner Health, underscoring that AI infrastructure and digital health are absorbing much of the capital flowing into the city. Investors, the tracker noted, are increasingly thesis-driven around the AI application layer and vertical software — and willing to pay up for companies, like Modal, showing real revenue.

Verification

Frequently Asked Questions

How much did Modal Labs raise and at what valuation?
Modal Labs raised $355 million in a Series C announced May 21, 2026, at a post-money valuation of $4.65 billion. The round was structured in tranches, with the first investors entering at a $2.5 billion valuation before demand pushed the second tranche to $4.65 billion.
Who led the round?
General Catalyst and Redpoint led the Series C. New investors Menlo Ventures, Bain Capital Ventures and Accel also participated, alongside existing backers.
What does Modal Labs do?
Modal provides serverless cloud infrastructure that gives AI developers on-demand access to GPUs for running AI workloads, plus a sandbox product for safely testing AI-generated code before deploying it. It is led by co-founders Erik Bernhardsson (CEO) and Akshat Bubna (CTO).
Is Modal Labs based in New York?
Yes. Modal is headquartered in New York, with additional offices in San Francisco and Stockholm. It was among the largest NYC tech funding rounds of 2026.