AI Startup Factory Raises $200 Million at $5 Billion Valuation

Factory, a San Francisco-based startup specializing in AI agents for enterprise engineering teams, raised $200 million in a funding round that valued the company at $5 billion. The round included investments from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, and Sound Ventures.

Founded in 2023 by Matan Grinberg and Eno Reyes, the company provides a platform for enterprises to build, test, and maintain software using AI agents. This latest valuation represents a significant increase from April, when the company raised $150 million at a $1.5 billion valuation. Factory competes with other AI coding platforms such as Cognition and Cursor.

CEO Matan Grinberg noted that large enterprises are moving away from individual coding agents toward "software factories" that serve as the core foundation for entire software companies. This shift coincides with broader industry trends, as firms like Coinbase and Block restructure their workforces to capitalize on AI-driven productivity gains.