Fal, a generative media platform for developers, was named with thoughtful duality.
At first glance, Fal stands for "features and labels," a machine learning term referring to input data and the answers a model learns to generate. But there’s another layer—Fal is also a Turkish term for "fortune telling," the startup’s cofounders Burkay Gur and Gorkem Yurtseven tell me.
"It’s a good Easter Egg that’s there," said Gur. "We have a lot of Turkish employees, and it’s fun when they notice."
Gur and Yurtseven, both originally from Turkey, first connected in the early 2010s in San Francisco. They both worked in AI and machine learning at tech companies—Yurtseven was at Amazon, while Gur was at Oracle then Coinbase—and became longtime friends. In the dead of COVID-19, the two were in the same "bubble" in Palm Springs, talking about AI. They founded Fal in 2021, looking to provide developers with the platform and acumen to more readily use generative AI models for image and video generation.
"We made an early bet to position ourselves as just focusing on generative media as opposed to many others who were very excited about LLMs," Gur told Fortune. "We basically left the LLMs behind, and specialized in image, video, and audio-type models."
The company’s been in the midst of rapid “make sure hands and feet are inside the vehicle” growth and now has 22 employees. Only four months after announcing its Series A, the startup has reached a new milestone: Fal has raised a $49 million Series B, Fortune can exclusively report. Notable Capital led the round with Andreessen Horowitz, while Bessemer Venture Partners, Kindred Ventures, and First Round Capital participated. With the deal, a16z general partner Jennifer Li and Notable Capital managing partner Glenn Solomon will join Fal’s board.
If you’re new to generative AI for images and videos, the most important thing you should know is this: Using these models can feel infinite. You can rapidly generate impossible videos and images, from golden astronauts in space to penguins playing instruments. And while this sounds aesthetically cool but fundamentally abstract (a framework generative images have run into in the past), what Gur and Yurtseven are seeing is that businesses are starting to actively want to use this tech. Fal currently serves north of 50 enterprises, including Quora, Perplexity, and Canva. (Perplexity CEO and cofounder Aravind Srinivas is a Fal investor. Fortune has a business partnership with Perplexity.)
The use cases are both legion and specific, with some startups building applications on the platform while other companies are focusing on AI-generated avatars for training and education. Design super-unicorn Canva has been using Fal as it develops and integrates its AI-powered editing tools.
"The use cases are very broad, much broader than I think I initially expected," said Dan Cahana, investor at Notable Capital. "You play with these models, and it’s fun. You send them to your family, and you blow your grandparents’ minds with it. But as you spend more and more time, you realize: This totally changes photo editing, architectural design, fashion design, all sorts of creative pursuits, where the time from imagination to execution can take a while. Here, you can shorten that pretty dramatically."
There’s also a world of indie developers experimenting with Fal, now more than one million. And that developer community is key to Fal’s present, future, and opportunity moving forward. But the developer world Fal is serving extends beyond traditional software engineers to creatives, said Steve Jang, founder and managing partner at Kindred Ventures.
"There's a community globally, and I’d say it’s hundreds of millions of creators, artists, and designers that are working with media today," said Jang, who led Fal’s Series A. "That eclipses the number of software developers, for example…I think, ultimately, generative media, over the next ten years, represents a multitrillion-dollar opportunity."
In quick succession, generative media has grown increasingly competitive—think: Runway, Synthesia, and OpenAI’s Sora and DALL-E—and, as a sector, faces copyright concerns. But generative media is clearly growing as AI evolves, and Fal occupies an interesting spot, working across the space with open and closed source models. The company is setting itself up to meet an expanding opportunity. Yurtseven said that the startup’s "current GPU fleet is in the 1000s, and we expect this year to get to the tens of 1000s of GPUs." Yurtseven, Gur, Jang, and Cahana all seemingly feel that 2025 is shaping up to be a defining year for generative media.
"This is something that’s going to be in our lives, and something every company is going to have to invest in," said Yurtseven. "This is a real emerging industry, and it’s going to change a lot this year."
What those changes will look like, we have some idea. But with boundless possibilities, there are also unknowns you have to be ready to meet. And that’s where the dual-meaning of Fal’s name becomes especially fitting. Generative AI and fortune-telling (different as they are) are both engaged with something fundamental—our drive to explore, to test ideas and wrestle with them, and to find the boundaries of our own ideas and lives.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.
Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.
