AI coding startup Factory has reached a $1.5 billion valuation after closing a $150 million Series C funding round, marking a major milestone in the fast-growing enterprise AI software market.
The funding round was led by Khosla Ventures, with participation from investors including Sequoia Capital, Insight Partners, Blackstone, and NEA, according to the company.
Factory builds AI-powered coding agents designed to automate parts of software development, including code generation, debugging, and system maintenance. The company says its goal is to transform how enterprise engineering teams build and manage software using autonomous AI systems.
Factory said in a statement: “We started Factory three years ago with a single mission: bring autonomy to software engineering.”
The company added that its AI agents are already being deployed in enterprise environments to support large-scale software workflows.
The factory also said: “This funding will accelerate our investment in research, product development, and global expansion.”
The startup’s platform, which it calls “software factories,” allows engineering teams to integrate AI agents into existing development pipelines and to use multiple underlying AI models based on task requirements.
The factory is competing in a crowded AI coding market that includes tools from Microsoft, GitHub, Anthropic, Cursor, and other emerging startups, as companies race to improve developer productivity through generative AI.
The company says its technology is already being used by firms including Nvidia, Adobe, EY, Palo Alto Networks, and Adyen, signalling growing enterprise adoption of AI-assisted software engineering.
Industry analysts say AI coding tools have become among the most commercially successful applications of generative AI due to their direct impact on productivity and cost reduction for software development teams.
The latest valuation highlights continued investor confidence in enterprise AI infrastructure and automation tools as demand accelerates across global tech markets.
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