San Francisco: Factory has raised $150 million in a Series C round at a $1.5 billion valuation. Khosla Ventures led the deal. Sequoia Capital, Insight Partners, Blackstone, Evantic Capital, Abstract Ventures, 20VC, NEA, and Mantis VC all participated. Keith Rabois, managing director at Khosla Ventures, joined the board.
Matan Grinberg and Eno Reyes founded Factory in 2023. Its core product is a suite of AI agents called Droids. Unlike most coding tools, Droids cover the full software development lifecycle like testing, code review, documentation, and deployment, not just code generation.
Grinberg’s central argument is simple: AI agents are only as effective as the infrastructure around them. Most enterprise coding tools were never built with that in mind.
The model-agnostic architecture is Factory’s main differentiator. Droids switch between foundation models like Claude, DeepSeek, GPT, depending on the task. That flexibility cuts vendor lock-in and lets teams pick whichever model performs best for each workflow.
Already, hundreds of thousands of developers at Nvidia, Adobe, EY, Palo Alto Networks, Morgan Stanley, Adyen, MongoDB, Bayer, and Zapier use Droids daily.
This round puts Factory in direct competition with Claude Code, Cursor, GitHub Copilot, and Cognition. Claude Code currently holds an estimated 54% of the AI coding market, according to Menlo Ventures.
Beyond the usual venture firms, however, Blackstone’s involvement stands out. When a firm managing over a trillion dollars joins an AI coding round, it signals the category has crossed from venture conviction into institutional exit territory.
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