Factory, a startup building AI agents for enterprise engineering teams, has raised $200 million at a $5 billion valuation, more than triple the $1.5 billion it was valued at in April, Reuters reported.
Investors include Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, Sound Ventures, NEA, Mantis VC and Clearlake. The round brings Factory’s total funding to more than $400 million, the company said in its announcement, and the money will go toward research, product and global go-to-market.
From coding agents to “software factories”
Matan Grinberg and Eno Reyes founded the San Francisco company in 2023. Its platform lets enterprises use AI agents to build, test and maintain software, putting it in competition with Cognition and Cursor. “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,” Grinberg said.
Factory says it is used by hundreds of thousands of developers and names Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe and T-Mobile as customers. It pitches a single governed system across the development lifecycle, letting enterprises control which models it uses and where it runs: in the cloud, on-premises or fully air-gapped.
In April, the company announced Factory 2.0, moving the platform from individual coding agents to software factories. It has since launched Factory Router, which routes each task to a model automatically and, Factory says, cuts token spend by more than 60%, along with an Agent Effectiveness tool that measures what customers get for their AI spending.
A crowded, richly funded market
The April round of $150 million was led by Khosla Ventures, and Khosla’s Keith Rabois joined the board, TechCrunch reported at the time. Grinberg has said Factory’s ability to switch between foundation models is a key differentiator. Rivals are raising even more: Cognition raised $2 billion at a $48 billion valuation earlier this month, according to Reuters. Factory hasn’t disclosed revenue.
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