“So, I grew up in Australia,” said Tuhin Srivastava, CEO and cofounder of AI inference unicorn Baseten. “And, in Australia, you learn to count with these ‘base ten’ blocks. They’re the building blocks of how you count, how you operate.”

Years after his days of stacking yellow and green blocks in the classroom, Srivastava now spends his time playing with a very different set of building blocks. The Baseten CEO and cofounders Amir Haghighat, Philip Howes, and Pankaj Gupta provide the infrastructure that AI models run on. It’s a classic “picks and shovels” business that, right in the middle of a rollicking AI boom, is helping companies deploy, manage, and scale AI applications. 

Or, to use Srivastava’s analogy, the company is laying “the train tracks so the models can run.” The trains that run on Baseten’s tracks can be anything—from large language models to AI models that generate video or that turn voice into text. 

Srivastava told Fortune that Baseten’s revenue has grown by “more than 10x” over the last 12 months, and the company’s big-name customers include Abridge, OpenEvidence, Clay, Patreon, and Writer. Now, six months after raising a $75 million Series C, Baseten is re-upping with a $150 million Series D, Fortune has exclusively learned. The deal, which almost triples Baseten’s valuation to $2.15 billion, was led by Bond, with participation from new investors including CapitalG, Premji, and Scribble as well as existing investors Conviction, 01a, IVP, Spark, and Greylock.

Baseten focuses on the inference side of AI—the process by which trained AI models use their knowledge to generate predictions and decisions.

“Inference will be one of the biggest markets in AI,” said Sarah Guo, Conviction founder and an early Baseten investor, via email. “It has become clear that open source AI and custom models are here to stay. The ongoing struggles of research labs to provide performance, scale and reliability in the face of massive demand shows just how technically hard this problem is, and Baseten has the leading product and most sophisticated, stickiest and happiest customers in the category.”

In his role at Baseten, Srivastava has a front seat to the state of the AI application layer, and he says it’s moving as fast as conventional wisdom states, “very dynamic, very savvy, kind of no sunk cost, and off to the races very, very quickly.”

“The biggest challenge [and] opportunity are the same: rapid growth,” said Jay Simons, Bond general partner, via email. “Growing and scaling as quickly as they are is a challenge for any company… Baseten carries an incredible amount of responsibility for its customers… It’s a critical service that needs to be absolutely bullet-proof.”

What happens if the AI wave crashes? I asked Jill Chase, CapitalG partner. 

“It’s not like they need tons of unique companies building AI products, which I think there will be,” said Chase. “But even if there weren’t, all AI is pegged to inference, which is usage of AI products. I think that’s a bet everyone is very comfortable making—that AI usage will continue to grow massively over time, even if it’s consolidated to three or hits three billion customers.”

There’s certainly precedent for startups growing into behemoths by serving other startups (take Stripe, for example). The question, of course, is how big this market ultimately is. Srivastava’s placed his bets. 

“We think AI applications are just the last great market,” he said. “This will be bigger than anything we’ve ever seen… We think that’s the end state of the world from a technology perspective, at least as far as we see it… We want to be the index [for that economic growth]. If the market as a whole wins, we win”

In short, Srivastava believes that the building blocks, the foundation, will hold.

See you Monday,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

- Augment, a San Francisco-based AI productivity platform for logistics, raised $85 million in Series A funding. Redpoint Ventures led the round and was joined by 8VC, Shopify Ventures, Autotech Ventures, and others.

- Exa, a San Francisco-based AI search infrastructure company, raised $85 million in Series B funding. Benchmark led the round and was joined by Lightspeed, YCombinator, and NVentures. 

- Sola Security, a Tel Aviv, Israel-based AI assistant designed for cybersecurity, raised $35 million in Series A funding. S32 led the round and was joined by M12, New Era Capital Ventures, and others.

- Hello Patient, an Austin, Texas-based developer of conversational AI for patient communications, raised $22.5 million in Series A funding. Scale Venture Partners led the round and was joined by 8VC, Bling Capital, Max Ventures, Remus Capital, and FirstLook Partners.

- Fiveonefour, a Portland, Ore.-based data and analytics AI and developer tooling, raised $17 million in funding. Dimension Capital led the round and was joined by Stage 2 Capital, Flybridge Capital Partners, Ridge Ventures, Tokyo Black Venture Capital, and Vermillion Cliffs.

- Revalia Bio, a New Haven, Conn.-based platform designed to drug developers insights from real human organs, raised $14.5 million in seed funding. America’s Frontier Fund and Sierra Ventures led the round and were joined by others.

- Plural, a San Francisco-based tokenized asset management platform, raised $7.1 million in seed funding. Paradigm led the round and was joined by Maven11, Volt Capital, and Neoclassic Capital.

- NewDays, a Seattle, Wash.-based developer of an AI-powered cognitive health platform for patients with mild cognitive impairment and dementia, raised $7 million in seed funding from General Catalyst and Madrona.

- Throxy, a San Francisco-based outbound sales platform, raised $6.2 million in seed funding. Base10 Partners led the round and was joined by Y Combinator.

- Alpic, a Paris, France-based MCP-native cloud platform, raised $6 million in pre-seed funding. Partech led the round and was joined by K5 Global, Irregular Expression, Yellow, Drysdale, Kima Ventures, and Galion.exe, others. 

- Elysian, a Nashville, Tenn.-based AI-powered third-party administrator for commercial insurance, raised $6 million in seed funding. Portage led the round and was joined by American Family Ventures and TenOneTen Ventures.

Private Equity

- Babcock Wanson Group, backed by Ambienta, acquired ACT Andaluces, a Málaga, Spain-based industrial boiler maintenance service provider. Financial terms were not disclosed.

- Bain Capital acquired UST HealthProof, an Aliso Viejo, Calif.-based health plan company, from UST. Financial terms were not disclosed.

- Rainier Partners acquired Kleen-Tech Services, a Denver, Colo.-based janitorial services provider. Financial terms were not disclosed. 

- Rithm Capital agreed to acquire Crestline Management, a Fort Worth, Texas-based alternative investment manager. Financial terms were not disclosed.

- Splash Plumbing, backed by Five Points Capital, acquired James LeCourt Plumbing, a Foothill Ranch, Calif.-based plumbing company. Financial terms were not disclosed.

Other

- Atlassian agreed to acquire The Browser Company, the New York City-based developer of the Dia and Arc web browsers, for $610 million in cash.

People

- FTV Capital, a San Francisco-based growth equity firm, promoted Gio Bacarella to principal.