Brief
Published:
More than three years after the emergence of generative AI, AI-assisted coding remains by far the most popular and lucrative use case for this technology.
Although several companies – including Anthropic, creator of Claude Code, as well as Cursor and Cognition – are already vying for dominance, investors believe there is room for at least one more player.
On Wednesday, Factory, a startup developing AI agents for enterprise engineering teams, announced that it had raised $150 million at a valuation of $1.5 billion. The round was led by Khosla Ventures, with participation from Sequoia Capital, Insight Partners and Blackstone. Keith Rabois, managing director of Khosla Ventures, has joined the startup’s board of directors.
The factory’s founder, Matan Grinberg, told the Wall Street Journal that the company’s key differentiator is its ability to switch between different foundation models, like Anthropic’s Claude or Chinese AI startup DeepSeek. However, startups like Cursor also don’t rely on a single model to generate code.
Factory clients include engineering teams from Morgan Stanley, Ernst & Young and Palo Alto Networks.
The startup was founded in 2023 after Grinberg, then a doctoral student at UC Berkeley, sent a cold email to Sequoia partner Shaun Maguire. The two bonded over mutual academic interest. (Maguire’s doctorate from Caltech is in the same area of physics that Grinberg was studying.)
Maguire convinced Grinberg to drop out and launch Factory, with Sequoia backing the startup at the seed stage.
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