AI coding startup Factory hits $1.5B valuation with $150M funding round

Factory, a startup developing AI agents for enterprise engineering teams, has raised $150 million in a funding round that values the company at $1.5 billion. The investment was led Keith Rabois, a managing director at Khosla Ventures, has joined the startup's board. Factory founder Matan Grinberg told the Wall Street Journal that the company's key differentiator is its ability to switch between different foundation models, such as Anthropic's Claude or Chinese AI startup DeepSeek. The startup's customers include engineering teams at Morgan Stanley, Ernst & Young, and Palo Alto Networks. Factory was founded in 2023 after Grinberg, then a PhD student at UC Berkeley, cold-emailed Sequoia partner Shaun Maguire. Maguire convinced Grinberg to drop out and launch the startup, with Sequoia providing seed funding.