The San Francisco startup's autonomous 'Droids' are winning over enterprise clients like Morgan Stanley and EY, and Khosla Ventures is betting big on the company's vision for automated software engineering.
Factory AI, the San Francisco-based startup building autonomous AI agents for software development, has closed a $150 million Series C round. The deal values the three-year-old company at $1.5 billion.
Khosla Ventures led the round, with Keith Rabois joining Factory AI’s board as part of the deal. Sequoia Capital, Blackstone, Insight Partners, and NEA all participated.
Total funding for Factory AI now sits at roughly $220 million. For a company founded in April 2023, that’s a remarkably steep trajectory.
What Factory AI actually builds #
The company builds what it calls “Droids,” autonomous AI agents designed to handle tasks across the full software development lifecycle. These aren’t just tools that suggest the next line of code. They’re meant to take on entire workflows, from writing and reviewing code to handling migrations and incident response, operating within major cloud environments like AWS, Azure, and GCP.
Factory AI counts Morgan Stanley, EY, Palo Alto Networks, Adyen, Groq, and Chainguard among its customers.
The competitive landscape is brutal #
Factory AI is positioning itself against competitors including Anthropic and OpenAI. Rather than building foundation models and then bolting on coding capabilities, the company is purpose-building agents specifically for enterprise engineering teams.
The SDLC, or software development lifecycle, encompasses everything from initial code generation to testing, deployment, and ongoing maintenance. Factory’s ambition is to cover the full spectrum with its Droids platform, which supports integration without requiring major changes to existing workflows or tools.
Co-founders Matan Grinberg and Eno Reyes, both Princeton alumni, launched the company in April 2023.
What this means for the AI investment landscape #
This round is one of the larger AI funding events so far in 2026. The main objective of the new funding is to accelerate research, product development, and global market penetration.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our