Popular open source AI development tool Ollama raises $65 million, growing to nearly 9 million users

The popular open source AI tool He is It raised a $65 million Series B, led by Theory Ventures founder and CEO Jeff Morgan, tells TechCrunch.

This round follows a previous $15 million round led by Benchmark’s Peter Fenton. All told, the company has now raised $88 million.

Ollama, launched in 2023, helps developers run open-weight AI models on their computers, and get them up and running in minutes. It has been praised by developers across countless people an exercise sites, videos, Blogs and Social media Supports. You have collected 176,000 stars and nearly 17,000 forks On github.

Developers can also use Ollama to find models and access larger, more complex models hosted on its cloud across several subscription tiers, from free to $100 per month. It also tracks usage based on GPU time, not token limits.

If the mission of helping developers build more easily on their PCs sounds vaguely familiar, it should be. Morgan and his co-founder Michael Chiang previously helped build Docker Desktop. They came to Docker after the previous startup bought Kitematic. Docker creates containers that help cloud applications move easily from cloud to cloud, or from desktop to cloud, eliminating all the annoying hardware configuration issues.

So, Ollama did for AI what Docker and Docker Desktop did for the cloud.

“Open models started coming out in 2023 but were really hard to use,” Morgan said. It was geared towards researchers at the time, not programmers. “As a result, it was really difficult to operate.” Three years after its launch, Ollama is now “used by more than 8.9 million developers every month, making up 85% of the Fortune 500 and growing like crazy,” he said. All this with only 14 employees.

That professional experience is what attracted Benchmark’s Peter Fenton to lead its previous round and join the board.

“What Jeff and Michael built with Docker is used by more than 10 million developers every day. The creative powers to create an ubiquitous product for developers are extremely rare,” Fenton told TechCrunch.

Morgan and Fenton declined to discuss the startup’s revenue and new valuation. However, Morgan says Ollama’s proving point as a company happened around January, when OpenClaw became popular. That’s when larger open forms “suddenly became able to do these proxy tasks, like programming. And obviously we’ve seen an explosion in assistants like OpenClaw, and this idea that open forms can get real work done.”

Since then, the industry has been buzzing with the idea that paying users (particularly deep-pocketed companies and fast-growing startups in the field of AI applications) will increasingly shift to more affordable open models, reserving their use of closed models like Anthropic on a more as-needed basis.

“I still think that’s the part where most of the debate gets it wrong,” Fenton says of open versus closed AI models. “It’s not an either/or.” He assures that there will be a lot of work for both. However, every company with high heuristics overhead — the costs of using models — has a “vital existential project” that prompts it to move “to open-weight models,” he says.

There is a lot of evidence that such startups and companies They are already turning to open models for their daily needs. This clearly bodes well for Olama’s cloud business.

But what’s even more interesting is that Ollama is another example of how AI is creating a new raft of open source projects that are turning into companies pursued by venture capital firms. There are open source inference providers such as Inverct, vLLM Maker, and RadixArk, maker of SGLang. There are OpenClaw and its alternatives Like NanoClaw. There are even small startups building their own open models From scratch, like Arcee.

Certainly not all Ollama fans were happy with the company continuing its quest to make a living. About a year ago, handful to Blog and Social media posts She complained that her cloud business was drawing attention away from her beloved free project and cited Ollama as an example of this The so-called “Enshittification” of development toolsalso called trend.

But Morgan sees its cloud service as an evolution of its open source mission to help programmers find and use models easily. These large, open, modern models are often “too big to run on your computer. So we said, ‘Hey, let’s help find the right account for that,'” he explained.

Board member Fenton adds, “Nothing has changed for the core free product on desktop. There is no change to the premise that this is where you can discover and play local models.”