Credit: Factory
“Across the world’s largest enterprises, we are seeing a move from individual coding agents to software factories that serve as the core foundation from which an entire software company operates,” said Matan Grinberg, co-founder and CEO of Factory.
The San Francisco company has raised $200 million at a $5 billion valuation, it said in a press release on 15 September. Grinberg and co-founder Eno Reyes also set out the details in a company blog post.
“The adoption and results our customers are seeing validate the opportunity to rebuild the entire software development system, and we are still at the beginning,” Grinberg said.
Who invested
The round came from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners and Evantic Capital. Sound Ventures, NEA, Mantis VC and Clearlake also took part.
Angel investors include former Formula One champion Nico Rosberg, investor Brad Gerstner and Salesforce chief executive Marc Benioff.
The valuation is more than three times the $1.5 billion Factory carried in April, according to the release. The round takes its total funding to more than $400 million. Factory said it will spend the money on research, product and global go-to-market.
What Factory sells
Grinberg and Reyes founded Factory in 2023. Its stated mission is to bring autonomy to software engineering, so that software builds and improves itself.
The company sells enterprises a single system that covers the whole software development lifecycle. Customers control how the system learns and which AI models it uses. They also choose where it runs: Factory’s managed cloud, their own servers, or fully air-gapped environments.
Factory says hundreds of thousands of developers use the platform. Its release names Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks and Adobe as customers. The blog post adds T-Mobile.
Product launches since April
In April, Factory announced Factory 2.0, which moved the platform from individual coding agents to what it calls software factories. It then launched Factory Router, which picks a model for each task. The company says the router cuts token spend by more than 60%.
Factory has also opened deployment to air-gapped and high-security environments, which it says extends it to regulated and public-sector customers. A tool called Agent Effectiveness shows enterprises what their AI spending produces, according to the company.
A crowded market
Factory competes with Anthropic, OpenAI and SpaceX, which all now offer AI coding tools, the Journal reported. SpaceX closed its Cursor deal in August.
Earlier this month, Devin maker Cognition raised money at a $48 billion valuation. CodeRabbit, which reviews AI-written code, raised $143 million in August.
On 15 September, workflow company Temporal raised $550 million to keep AI agents from failing. In July, researchers escaped the sandboxes of four leading AI coding agents.
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