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Factory Raises $200M at $5B Valuation as Enterprise Demand for AI Software Development Accelerates
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Factory has raised $200 million in new financing at a $5 billion valuation, giving the enterprise AI software development company a significant increase in value just five months after its previous funding round.
The latest financing brings Factory's total funding to more than $400 million. The company said the new capital will support investments across research, product development and global go-to-market.
Factory was valued at $1.5 billion following a $150 million Series C announced in April 2026. The latest round therefore represents more than a threefold increase in valuation.
Backing From Major Investors
The latest financing includes participation from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, Sound Ventures, New Enterprise Associates (NEA), Mantis Venture Capital and Clearlake Capital Group, according to Factory.
The financing comes amid continued investor interest in AI-assisted and autonomous software development, as enterprises look for ways to increase software engineering productivity and integrate AI more deeply into development workflows. Reuters reported that AI-assisted coding has become one of the more widely adopted applications of generative AI.
From Coding Agents to Software Factories
Founded in 2023 by Matan Grinberg and Eno Reyes, Factory initially focused on AI coding agents and has since expanded its proposition toward broader software factories covering the software development lifecycle.
The company says its platform enables enterprises to operate a unified system across software development, with control over how the system learns, which models it uses and where it is deployed.
Factory supports cloud, on-premises and fully air-gapped environments, an approach designed to address requirements around control and security for enterprise and regulated environments.
Enterprise Adoption Expands
Factory says its platform is now used by hundreds of thousands of developers across major organisations, including NVIDIA, Royal Bank of Canada, Adobe, Palo Alto Networks and T-Mobile.
The company has also expanded its platform capabilities. Its Factory Router provides task-level model routing, while Agent Effectiveness is designed to give enterprises greater visibility into the measurable value generated by AI software development. Factory said its Router can reduce token spending by more than 60% while maintaining frontier performance.
The company's earlier Series C announcement also highlighted adoption across enterprises including NVIDIA, Adobe, EY, Palo Alto Networks and Adyen, alongside continued investment in autonomous software factories.
Capital to Support Global Expansion
Factory plans to deploy the latest funding toward research, product development and global go-to-market expansion.
The focus reflects the company's broader shift from individual AI coding tools toward enterprise infrastructure designed to support increasingly autonomous software development.
As organisations move beyond individual developer assistants and experiment with AI agents across development workflows, platforms that combine automation with governance, deployment flexibility and measurable outcomes are becoming an increasingly important part of the enterprise AI stack.
The Enterprise AI Coding Market
Factory's latest financing comes during a period of rapid investment in AI-powered software development.
The company is competing in a market that includes AI coding and software development platforms such as Cognition and Cursor, while enterprises increasingly evaluate AI agents not only for code generation but also for testing, maintenance, documentation and other software engineering tasks.
Factory's latest valuation places greater emphasis on the opportunity it sees in enterprise-wide autonomous software development rather than AI-assisted coding as a standalone productivity tool.
About Factory
Factory is an AI software development company founded in 2023 by Matan Grinberg and Eno Reyes. Its platform is designed to help enterprises build and operate autonomous software factories across the software development lifecycle, with deployment options spanning cloud, on-premises and air-gapped environments.