More than three years after the advent of generative AI, AI-assisted coding remains the most popular and profitable use case for the technology.
Although many companies, including Claude Code creator Anthropic, as well as Cursor and Cognition, are already fighting for dominance, investors believe there is room for at least one more player.
On Wednesday, Factory, a startup that builds artificial intelligence agents for enterprise engineering teams, announced it had raised $150 million in a $1.5 billion round. 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.
This was reported by the founder of the factory, Matan Grinberg The Wall Street Journal the company’s key differentiator is its ability to switch between different foundational models, such as Anthropic’s Claude or Chinese AI startup DeepSeek. However, startups like Cursor also don’t rely on a single model to generate code.
The factory’s clients include engineering teams from Morgan Stanley, Ernst & Young and Palo Alto Networks.
The startup was founded in 2023 after Greenberg, then a PhD student at UC Berkeley, cold-emailed Sequoia partner Shaun Maguire. The two shared a mutual academic interest. (Maguire’s PhD from Caltech is in the same area of physics that Grinberg studied.)
Maguire convinced Greenberg to leave and start Factory, with Sequoia backing the startup at its early stage.
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