Factory, a startup developing AI agents for enterprise engineering teams, has raised $200 million in a funding round that more than tripled its valuation to $5 billion.
The round, announced September 15, was backed by Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, and Sound Ventures, among others. The San Francisco-based company had raised $150 million at a $1.5 billion valuation just five months earlier in April.
From coding assistants to software factories
Founded in 2023 by Matan Grinberg and Eno Reyes, Factory offers a platform that lets enterprises use AI agents to build, test, and maintain software — competing 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 Grinberg, the company’s co-founder and CEO.
AI-assisted coding has emerged as one of the most widely adopted uses of generative AI, drawing billions of dollars as businesses look to speed up software development and improve productivity. Companies such as Coinbase and Block are already reshaping their workforces around AI-driven productivity gains.
A hot corner of the market
The deal follows a string of massive raises in the space: Cognition raised $2 billion at a $48 billion valuation earlier this month. Meanwhile, London forecasting startup Mantic landed a $25 million seed round led by Radical Ventures, with participation from Microsoft’s M12, Thinking Machines Lab, and Balderton Capital, after its AI forecasting system beat nearly every human player in a major prediction tournament.
The rapid pace of AI development has also drawn warnings: top industry executives have called for slower advances amid mounting fears the technology could be misused — a debate now playing out in Washington and at the United Nations.
