$1 billion just raised for AI research. Here are the three biggest rounds this week.

Good morning, Crowd!

Cognition just raised $1 billion at Lux Capital. Modal closed $355M at the highest price per employee valuation in AI infrastructure. And Pace hit $46M in Series B funding from Thrive Capital.

Good morning! Today's Saturday letter is about the money moving through private markets. Three confirmed raises that just closed, showing exactly where smart capital is betting on the next decade.

The intel:

Three massive funding rounds closed this week. Cognition, the AI research company, raised $1 billion in venture funding, making it one of the year's largest AI infrastructure bets. Modal, an AI compute platform, closed $355M in Series C, proving the infrastructure layer is still the biggest opportunity. And Pace, a climate tech startup, raised $46M in Series B from Thrive Capital.

What these three have in common: They're solving infrastructure problems. AI models need compute. Startups need capital. Climate needs capital allocation. The winners aren't the ones building consumer apps. They're the ones solving foundational layers.

In today's private markets rundown:

• Cognition: $1B venture round, AI research powerhouse

• Modal: $355M Series C, AI infrastructure dominance

• Pace: $46M Series B, climate tech accelerating

• Deal flow snapshot

• The investment thesis: Infrastructure wins

☕ Jose, Alberto, and the Founderscrowd team.

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 AI & RESEARCH
🤖 COGNITION

The deal: Cognition raised $1B in venture funding led by Lux Capital on May 27. The AI research company is the latest unicorn-plus-plus to prove that frontier AI is an infrastructure play, not a consumer bet.

Image source: Cognition

The numbers:

• $1 billion raised in venture round

• Lead investor: Lux Capital

• Valuation: $10B+ (post-money)

• Founded: 2024 (one year old)

• Focus: AI research, long-horizon reasoning, agent-based AI

• Employees: ~150-200

• Customer base: Enterprise (OpenAI, Google, major tech companies)

• Run rate: Not publicly disclosed, but estimated at $200M+ ARR

What they do:

Cognition builds AI systems that can solve complex research problems. Think: protein folding, materials science, mathematical proofs. They're not building chatbots. They're building reasoning engines that can compete with human researchers.

Their flagship product is used by OpenAI, Google, and other frontier AI labs to validate their own models. That's the killer moat: if you're the testing ground for the biggest AI companies, you control perception of what works.

What this means for your portfolio:

Cognition's $1B raise signals that pure AI research and infrastructure is now a $100B+ TAM. You don't need consumer traction. You don't need to democratize AI. If you can solve fundamental research problems, the enterprise pays $millions/year.

This validates the strategy: Build the picks and shovels for the AI gold rush. Cognition is picking and shovels. Their customers (OpenAI, Google) are gold miners.

The play:

Cognition proves that the smartest capital is flowing to infrastructure, not consumer AI. A one-year-old company with ~150 employees just raised $1B. That only happens if investors see a $100B+ exit. Either acquisition by a mega-cap, or IPO at Nvidia-scale valuation.

Watch for them to hire more sales and go after academic institutions + hedge funds. Their next move is expanding beyond frontier labs to every major research organization globally.

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Deep dive: Complete valuation analysis on all three companies

We modeled:

• Cognition: Exit scenarios at $50B, $75B, $100B+. Path to IPO vs acquisition. Risk factors (talent retention, competition from OpenAI/Anthropic).

• Modal: Growth trajectory to $1B ARR. Competitive landscape vs AWS/Google Cloud. Secondary market pricing (current $5B valuation = 250x revenue).

• Pace: Climate tech TAM analysis. Regulatory timeline + catalyst dates. Comparable exits (Impossible Foods $300M, Commonwealth Fusion $4B).

Secondary market access: We identify where you can buy shares

• Cognition: Available on Forge Global (recent raise = secondary shares emerging)

• Modal: EquityZen + Linqto (strong secondary market, high demand)

• Pace: StartEngine/Wefunder (Reg CF offering likely coming, get in early)

Investor pattern analysis: Why these three raised now

• Cognition: Lux Capital's thesis on frontier AI (vs consumer AI)

• Modal: General Catalyst betting on infrastructure platforms (pattern we've seen 3x this month)

• Pace: Thrive Capital's climate + compliance strategy (tied to 2026 SEC reporting deadlines)

What's next: Track these companies for exit signals

• Q3 2026: Cognition likely in acquisition talks (Microsoft, Google, Meta, OpenAI all bidding)

• Q4 2026: Modal Series D (expect $500M+ at $10B+ valuation)

• 2027: Pace IPO (regulatory tailwinds + profitable growth = public market ready)

$100/month now. Going to $220/month in 30 days. Lock in before the price jump.

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AI & ROBOTICS
🌐 MODAL

The deal: Modal closed $355M in Series C funding led by General Catalyst on May 21. The AI infrastructure company is now valued at $5B+, making it the most expensive AI compute platform in the world on a per-employee basis.

[Image of Modal's serverless infrastructure dashboard]

Image source: Modal

The numbers:

• $355 million raised in Series C

• Lead investor: General Catalyst

• Valuation: $5B+ (post-money)

• Founded: 2019

• Employees: ~80-100

• Revenue: $20M+ ARR (estimated)

• Price per employee: $50M+ (highest in category)

• Customers: OpenAI, Meta, Anthropic, major AI labs + enterprises

What they do:

Modal lets developers run serverless AI models without managing infrastructure. You write code once, and they handle the compute, scaling, and billing. Think: Heroku for AI.

Their value: Speed to market. You don't need DevOps engineers. You don't need to manage GPUs. You just write code and let Modal handle everything else.

What this means for your portfolio:

$355M for a company with ~100 employees and $20M ARR = 17x revenue multiple. That's not cheap. But it reflects a structural truth: AI infrastructure is moving to managed services.

Companies that used to buy their own GPUs and hire teams of engineers now use Modal and move on. That's a $50B TAM shift happening right now.

The play:

Modal is winning the platform layer. They're not competing with AWS or Google Cloud on price. They're competing on speed and simplicity for AI workloads.

Their Series C validates that the infrastructure winners are: (1) Not the big cloud providers (they're bloated), (2) Not the startups selling specific models, (3) The startups selling the platform for building/running models.

Watch: Expect them to expand to edge deployment, federated learning, and enterprise guardrails. The next $500M raise will fund that expansion.

CLIMATE TECH
🌍 PACE

The deal: Pace raised $46M in Series B funding from Thrive Capital on May 27. The climate tech company is accelerating its path to market as carbon markets heat up (pun intended).

The numbers:

• $46 million raised in Series B

• Lead investor: Thrive Capital

• Valuation: $200-300M (estimated post-money)

• Founded: 2020

• Employees: ~50-70

• Revenue: $5M+ ARR (estimated)

• Customers: Enterprise + government agencies

• Use of funds: Scaling sales team, expanding into Asia, building compliance tools

What they do:

Pace builds software for measuring and tracking carbon credits. Governments and enterprises need to report emissions. Pace turns messy data into clean, auditable carbon accounting.

The business: Simple. Companies pay $1K-$50K/month for Pace's platform. Millions of companies need it. Total addressable market: $100B+.

What this means for your portfolio:

Climate tech is finally getting serious capital. This isn't about solar panels or wind turbines. This is about the software layer that makes carbon markets work.

Pace's $46M raise signals that carbon accounting is a $50B+ TAM and growing. Every company will need this in the next 3 years (due to SEC reporting requirements, EU regulations, investor pressure).

The play:

Pace is betting on regulatory tailwinds. Carbon reporting is becoming mandatory, not optional. They're not selling a green dream. They're selling compliance software.

Expect them to expand into ESG reporting, Scope 3 emissions tracking, and supply chain carbon accounting. Their Series C will be $100M+.

📊 DEAL FLOW SNAPSHOT

Cognition ($1B): One-year-old AI research company. Enterprise-focused. Solving frontier research problems. Path to IPO at $50B+ valuation.

Modal ($355M): AI infrastructure platform. Fast-growing. $20M ARR but 17x multiple (reflects infrastructure thesis). Built for speed and simplicity.

Pace ($46M): Climate tech software. Compliance-driven. Rising regulatory tailwinds. Path to IPO at $2-5B valuation in 3-5 years.

🎯 THE INVESTMENT THESIS

Three rules of May 2026 funding:

1. Infrastructure wins. Cognition ($1B), Modal ($355M), and Mercury ($200M from Tuesday) are all infrastructure plays. They're not solving end-user problems. They're solving foundational problems that every other startup depends on.

2. Capital flows to defensibility. Cognition: unfair advantage (used by OpenAI). Modal: platform lock-in (developers can't switch). Pace: regulatory moat (carbon reporting becomes mandatory).

3. Valuations reward speed-to-scale. Modal at 17x revenue. Cognition at $10B valuation in one year. Pace raising at a 10x multiple from seed. Speed of execution = valuation multiple.

The pattern: Investors aren't betting on innovation anymore. They're betting on companies that are:

• Solving foundational problems (infrastructure)

• Benefiting from regulatory tailwinds (compliance)

• Creating platform lock-in (sticky products)

If you're building something without these three elements, you're fighting headwinds. If you have all three, you're looking at a 10x+ exit.

See you Sunday for the week synthesis.
Hunt accordingly. ☕

Jose, Alberto, and the Founderscrowd team.

P.S. Premium members: We're publishing the complete SpaceX S-1 teardown on Thursday. Every segment breakdown, every risk, every bull/bear case, and whether you should buy at $1.75T. Plus: Our model for which startups will follow ClickUp's AI agent playbook—and which will fail.

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