The factory has a valuation of $1.5 billion to build enterprise AI coding

More than three years after the advent of generative AI, AI-assisted coding remains the most popular and lucrative use case for the technology.

Although several companies — including Anthropic, maker of Claude Code, as well as Cursor and Cognition — are already vying for dominance, investors believe there is room for at least one more player.

On Wednesday, Factory, a startup that develops AI agents for enterprise engineering teams, announced it had raised $150 million at a valuation of $1.5 billion. 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 of directors.

The factory’s founder, Mattan Greenberg, told… Wall Street Journal The company’s main distinguishing feature is its ability to switch between different foundation models, such as Anthropic’s Claude or Chinese AI startup DeepSeek. However, startups like Cursor also don’t rely on a single model for creating code.

The factory’s clients include engineering teams at Morgan Stanley, Ernst & Young and Palo Alto Networks.

The startup was founded in 2023 after Greenberg, a PhD student at UC Berkeley, partnered with Sequoia Sean Maguire via cold email. The two bonded over mutual academic interest. (Maguire’s PhD from Caltech is in the same area of ​​physics that Greenberg was studying.)

Maguire convinced Grinberg to withdraw and launch Factory, with Sequoia backing the startup at the seed stage.