That would be notable for any 18-month-old company. It’s more striking in a world where nearly 80% of last year’s roughly $270 billion in AI venture dollars went to North America, and 60% went to AI companies based in the Bay Area. Europe captures just 13.6%. In other words: The center of gravity for AI money is still the U.S.—and yet one of the most important visual‑AI companies is being built in Germany.

The Freiburg‑based company raised a $300 million Series B at a $3.25 billion valuation late last year, in one of Europe’s largest AI financings. The round was co‑led by AMP and Salesforce Ventures, with strategic checks from Canva and Figma and participation from a who’s who of AI investors like a16z and Nvidia. For context, European generative‑AI startups raised about $6.1 billion between 2019 and 2024—a sliver of global GenAI funding.

Black Forest Labs’s models now power image generation and editing behind the scenes for a growing lineup that includes big‑tech platforms and productivity apps, from Meta to Canva. Cofounder Robin Rombach cites Flux Kontext, the company’s editing model, as a glimpse of what they think “visual intelligence” should look like. 

It was “the first model that was able to edit images and maintain character consistency,” he says. “You could, for example, take an image of yourself and then edit the image and maintain your likeness—it would still look like yourself afterwards.”​

The way they make money is also a little subversive in a world of locked‑down APIs. Open‑source and open‑weights releases are not charity; they’re top‑of‑funnel. 

“Open source is just a very good way of extending a funnel,” cofounder Andreas Blattmann says, recalling early days when community‑fine‑tuned models were already solving marketing problems by dropping products into new scenes. The company’s open‑weights models, meanwhile, are publicly available, downloadable, but under a non‑commercial license. 

Here’s the catch: If a large enterprise wants to put it in production, they have to come and buy a commercial license at Black Forest Labs. For everything else, there’s a low‑latency API. At a high level, Rombach says the mix is roughly 50/50 between usage‑driven products and classic enterprise licensing. The company declined to comment on exact revenue numbers.

On paper, Black Forest Labs is very much part of the global AI bubble; in conversation, the founders sound more like tortoises than hares. Rombach insists that visual generative AI is “at the moment where the technology is starting to work in a way that’s usable and adds to productivity value,” pointing to the “increased traction in productivity tools that are being built on top of our technology.” The goal, he told Fortune, is to build a sustainable company, and not to be “too dependent on capital markets” if the music stops.

The really big bet, though, is that images are just the entry point. By 2028, Blattmann wants Black Forest Labs to have grown into “the standard for visual intelligence” without losing small‑lab cohesion. 

Rombach sets the bar even higher and louder: He already sees Black Forest Labs as having shaped the future of visual AI. But, by 2028, he says, success will mean Black Forest Labs’s Flux will have “changed the trajectory of visual AI,” powering “purely visual agents,” richer simulation, and a new default for how machines see the world.

See you tomorrow,

Lily Mae Lazarus
X: @LilyMaeLazarus
Email: lily.lazarus@fortune.com
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VENTURE CAPITAL

- Alva Energy, a Cambridge, Mass.-based nuclear energy company, raised $33 million in funding. Playground Global led the round and was joined by Segra Capital, NGP, Mercator Partners, Alumni Ventures, and existing investors.

- Integrate, a Seattle, Wash.-based project management platform for defense projects, raised $17 million in Series A funding. FPV Ventures led the round and was joined by Fuse VC, Rsquared VC, and existing investors. 

- Tozaro, a Bedford, U.K.-based developer of polymer technology designed to reduce the cost of cell and gene therapies, raised £6 million ($8.2 million) in funding. Mercia Ventures led the round and was joined by existing investors.

- PolyGone Systems, a Kearney Point, N.J.-based microplastic monitoring and removal company, raised $4 million in seed funding. FYRFLY Venture Partners led the round and was joined by Tech Council Ventures, Golden Seeds, Interstate Fusion Ventures, and angel investors.

PRIVATE EQUITY

- Doctrine, a portfolio company of Summit Partners, acquired Maite.ai, a Barcelona, Spain-based AI copilot designed for legal professionals. Financial terms were not disclosed. 

- PlayPower, a portfolio company of Platinum Equity, agreed to acquire BCI Burke, a Fond du Lac, Wisc.-based playground equipment company. Financial terms were not disclosed.

- Spotlight AR, a portfolio company of Stone-Goff Partners, acquired Captivate Collective, a Vancouver, Canada-based customer marketing and advocacy consultancy. Financial terms were not disclosed.

EXITS

- Centerwell acquired MaxHealth, a Tampa, Fla.-based primary care platform, from Arsenal Capital Partners. Financial terms were not disclosed.

- RAF Equity acquired Boston Valley Terra Cotta, an Orchard Park, N.Y.-based manufacturer of architectural facades, from NewSpring. Financial terms were not disclosed.