Vercel's Valuation Soars to $9 Billion with New Accel-Led Investment

San Francisco, CA – Cloud startup Vercel is reportedly raising hundreds of millions of dollars in a new funding round led by existing investor Accel, pushing its valuation to approximately $9 billion. This significant increase nearly triples the company's valuation from about $3 billion in a previous round last year, signaling strong investor confidence in its growth and strategic direction. The news was initially reported by Kate Clark of Bloomberg, citing sources familiar with the matter.

Vercel, founded in 2015 by Guillermo Rauch, has established itself as a leading frontend cloud platform, widely recognized as the creator and maintainer of Next.js, a popular open-source React framework. The company's platform simplifies the development, deployment, and scaling of modern web applications, integrating features like edge computing and serverless functions. By May 2024, Vercel had surpassed $100 million in annual recurring revenue (ARR), with over a million developers utilizing Next.js monthly.

The dramatic surge in valuation underscores Vercel's pivotal role in the evolving landscape of web development, particularly its aggressive expansion into artificial intelligence (AI) applications. The company has made strategic investments in AI-driven tools, including v0, a generative UI product that creates user interfaces from natural language prompts, and the Vercel AI SDK, a comprehensive framework for building AI applications. These innovations are positioning Vercel at the forefront of the generative AI revolution in software development.

Accel, a long-standing backer of Vercel, previously co-led the company's Series A round in 2020. This continued investment highlights the firm's belief in Vercel's long-term potential and market leadership. The fresh capital is expected to further fuel Vercel's AI initiatives, potentially enabling new acquisitions, strengthening its enterprise security offerings, and procuring essential resources like GPUs to support its expanding AI-centric services.