Factory raises $200 million, valuation triples to $5 billion

Investing.com -- Factory, a startup that develops AI agents for enterprise engineering teams, raised $200 million in a funding round that increased its valuation to $5 billion from $1.5 billion, the company said Tuesday.

The round was backed by Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, and Sound Ventures, among others.

Founded in 2023 by Matan Grinberg and Eno Reyes, the San Francisco-based company offers a platform that allows enterprises to use AI agents to build, test and maintain software. The company competes with AI coding platforms such as 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," said Matan Grinberg, co-founder and CEO of Factory.

AI-assisted coding has become one of the most widely adopted uses of generative AI, attracting billions of dollars from investors as businesses aim to speed up software development and improve workforce productivity.

Cognition raised $2 billion at a $48 billion valuation earlier this month.

Companies such as Coinbase (NASDAQ: COIN) and Block (NYSE: XYZ) have reshaped their workforces around AI, citing improvements in productivity.

Factory previously raised $150 million at a $1.5 billion valuation in April.

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