Vercel Secures New Funding at $9B Valuation Amid AI Expansion
Front-end development startup Vercel Inc. is reportedly securing hundreds of millions of dollars in new funding. Sources indicate that Accel is leading the investment, which is expected to value Vercel at approximately $9 billion, nearly tripling its valuation from the previous $250 million raise last May, also led by Accel.
Vercel commercializes Next.js, a popular open-source framework for building web application interfaces. This technology offloads processing tasks typically performed in the user's browser to the website operator's servers, allowing for faster task completion and reduced webpage loading times.
The company offers a cloud service that enables developers to quickly update Next.js-based websites. According to Vercel, its software can complete code rollouts that usually take minutes in just a few seconds by eliminating the need to change a website's configuration settings before an update.
Vercel also provides several other development tools that facilitate tasks such as managing the database where a web application stores its information and rolling back faulty software updates. Reports of Vercel seeking new capital emerged amid a growth spurt in the company's services, including its lineup of artificial intelligence tools, which have become a core focus of its product development efforts.
Earlier this month, Vercel launched an AI programming assistant named v0, capable of suggesting interface design ideas and converting them into functioning code. Additionally, v0 can scan existing website interface code for technical issues.
In May, Vercel introduced a service called AI Gateway, allowing developers to quickly change the AI model used by a web application. If the large language model powering a chatbot goes offline, AI Gateway can reroute requests to a different algorithm.
The upcoming funding round is expected to facilitate Vercel's procurement of GPUs and accelerate its product development efforts through potential acquisitions. In January, Vercel acquired the startup behind Tremor, a popular open-source tool for building website interfaces.