Factory Hits $1.5B Building AI Coding Droids

April 16, Factory closed $150M at a $1.5B valuation. Khosla led, with Sequoia, Insight, and Blackstone in. Keith Rabois joins the board. The pitch: enterprise AI coding through what they call Droids — agents that already get used daily by hundreds of thousands of devs at Morgan Stanley, EY, and Palo Alto Networks.

The key differentiator according to founder Matan Grinberg: model-agnostic routing. Droids switch between Claude, DeepSeek, and others depending on task complexity. While Cursor leans into IDE workflow, Factory leans into the full software lifecycle — code generation, testing, review, documentation, deployment.

The enterprise positioning matters. Cursor and Codex own the developer-first wedge. Factory is going after the enterprise procurement pipeline — the part where IT directors care less about UX and more about model neutrality, audit trails, and integration depth.

The math says 2026 is the year AI coding splits into two markets: prosumer/IDE (Cursor, Codex) vs enterprise/lifecycle (Factory, Replit). Both will be huge. Different buyers, different products.

Link: https://techcrunch.com/2026/04/16/factory-hits-1-5b-valuation-to-build-ai-coding-for-enterprises/