Founder Started AI Company on a Dare

“In the crowded arena of AI coding, another startup has raised its flag.

 

Factory, which makes autonomous artificial intelligence bots or agents that code, is in talks to raise $150 million at a $1.5 billion valuation. Khosla Ventures will lead the round, and venture capitalist Keith Rabois will join the board. Other investors participating in the round include Sequoia Capital, Insight Partners and Blackstone.

 

The startup's agents -- named Droids -- can switch between different AI models, from OpenAI's GPT and Anthropic's Claude to cheaper ones like China's DeepSeek model, depending on the complexity of the task and what the customer wants, said Matan Grinberg, co-founder and chief executive officer of Factory.

 

The product's flexibility has become one of Factory's selling points to enterprise customers, which currently include Morgan Stanley, Ernst & Young and Palo Alto Networks. It also has been useful in recent months due to frequent outages at frontier AI company Anthropic, said Grinberg.

 

"I've been on calls with multiple customers while Claude was down," he said. "It's been the best marketing ever because I can just tell them that with Factory, we can dynamically route you to ChatGPT or [Google's] Gemini."

 

Anthropic is the maker of popular chatbot Claude and the viral coding app, Claude Code.

 

Cursor, another AI coding startup that last raised money in November at a nearly $30 billion valuation, also is model-agnostic. But while Cursor is an AI-assisted coding tool to enhance the work of individual developers, Factory is essentially creating an AI agent developer for enterprises.

 

"In the landscape at the Fortune 500 companies, the question is how do we build our organization for the next 20 years in this massive transformational wave of AI," Rabois said in an interview. "And that's not about making a developer be 25% better at coding."

 

Grinberg spent most of his life studying math and physics. While at the University of California, Berkeley, pursuing a doctorate in theoretical physics, he started taking computer science courses out of curiosity. That curiosity turned into genuine interest, and soon he was looking up videos on YouTube on how to start a company, he said.

 

In 2023 he cold-emailed Shaun Maguire, an investor at Sequoia, about his startup idea. Maguire, who also studied physics, took the meeting and the two bonded over shared academic interests. By the end of the meeting, Maguire dared Grinberg to drop out of Berkeley to start a company.

 

Grinberg took him up on his dare. Shortly after informing Maguire he had indeed dropped out, Maguire invited him into Sequoia's offices for a meeting. Sequoia became one of the startup's seed investors and Maguire joined the board.

 

Factory competes with startups like Cursor and Cognition, but it also counts the biggest AI labs -- which have also created their own AI coding tools in the past year -- as competitors.

 

Grinberg is unperturbed. "There are a lot of tools in the space," he said. "But none of them are approaching the problem like we are. I joke that our competitors, it's everyone and no one."” [1]

 

1. Founder Started AI Company on a Dare. Au-Yeung, Angel.  Wall Street Journal, Eastern edition; New York, N.Y.. 17 Apr 2026: B1.