AI startup Factory is in talks to raise fresh funding at a valuation of $1.5 billion, positioning itself as a key player in the rapidly evolving enterprise AI coding space. The company is reportedly looking to raise around $150 million, with backing from major investors including Khosla Ventures, Sequoia Capital, Insight Partners, and Blackstone.
Factory is focused on building autonomous AI coding agents, referred to as “Droids,” which are designed to handle software development tasks for enterprises. Unlike traditional AI coding assistants that support individual developers, Factory’s platform aims to function as a full-scale AI developer for organizations, automating coding workflows at an enterprise level.
A key differentiator of Factory’s technology is its model-agnostic approach. Its AI agents can dynamically switch between different large language models—such as those from OpenAI, Anthropic, or other providers—depending on task requirements, cost efficiency, or system availability. This flexibility has become a strong selling point, especially in scenarios where certain AI services face outages or performance limitations.
The company is already working with enterprise clients including Morgan Stanley, Ernst & Young, and Palo Alto Networks, indicating early traction in high-value corporate environments.
Founded by CEO Matan Grinberg, who previously pursued a PhD in theoretical physics at the University of California, Berkeley, Factory reflects a growing trend of startups building “agentic AI” systems capable of executing complex tasks rather than just assisting users.
