What Share of Revenue Do Modal Sandboxes Make?

Erik Bernhardsson says Modal Sandboxes now make up about a third of revenue, and the team considers them the company's second product.

Modal Functions launched in 2021, started showing product market fit in 2023, and now account for about two thirds of revenue. In practice that revenue is mostly inference, though people use Functions for other work too. Sandboxes launched in 2023 because people were using language models to output code and needed a place to run it. Modal already had infrastructure to take code and run it, including primitives for containers and isolation. He wrote a prototype and launched it in one day or two days. Some early users picked it up in 2023, but sandboxes were a pretty insignificant source of revenue going into the summer of 2023. Two years later the team discussed whether they even needed the product and whether to shut it down. It then started exploding. Language models got good at generating code, moving from refactoring functions and writing snippets to generating full apps. Growth came from vibe coding companies like Lovable, from Ramp running background agents on Modal, and from Neo Labs doing reinforcement learning on Modal sandboxes.

He had wanted a whole toolkit from the early days, almost like a cloud with storage, compute, and several ways to work with them. A multi-product company was not obvious to the outside until recently. Functions and sandboxes are both clear products now, and the team is also working on training and on batch.