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AI coding startup Factory is shopping for acqui-hires after tripling its valuation to $5 billion in five months, CEO Matan Grinberg tells Axios Pro.

Driving the news: The San Francisco-based company this week raised $200 million from Blackstone, Khosla Ventures, Sequoia Capital and Insight Partners.

Axios Pro spoke with Grinberg, who co-founded Factory, about the company's growth plans.

Editor's note: This interview has been edited for brevity and clarity.

Axios Pro: How do you differentiate yourself in a market with huge competitors?

Grinberg: "It's important for us that we are model-agnostic because all the enterprises that we work with, no one trusts or wants to standardize on just one model provider. You don't want to just use OpenAI, Anthropic, Grok or whatever. You want to be able to kind of arbitrage between them."

You use your competitors' models. Do you worry about getting cut off?

"For OpenAI, Anthropic, as they mature, they're realizing their businesses are a lot more like Azure or AWS, like Microsoft or Amazon. 

Half of the companies that they partner with are somewhat competitive to some of their offerings. It just doesn't matter. To be a good cloud provider, you just need to want the pie to get bigger and everything else will sort itself out. The reality is they're becoming like cloud providers."

You announced a deal in the spring. Have you made many acquisitions?

"One of the best ways these days to find incredible talent is through acquisitions.... One of the best ways to test for someone being ambitious is to [see if they did] the ambitious thing of starting a company.

We've done less than 10 deals, but it is something with this round we're about to scale up way more."

"The larger, the more complicated — so the more conviction we need. If it's a two-person team, it's very easy. If it gets into the 20s, it becomes more involved."

On the flip side, have you received acquisition interest — especially considering the Cursor deal?

"There's been tons of interest, but I think the reality is our main value is that we are independent.... I think [selling] would just diminish the business.

I won't comment on particular names, but the names probably wouldn't surprise you."

Factory to aggressively pursue acquisitions

The AI coding startup will use deals to add more talent, its CEO tells Axios Pro.

Portrait of a young man with blond hair and blue eyes, wearing a dark knit sweater, outdoors in a city with blurred lights in the background.

AI coding startup Factory is shopping for acqui-hires after tripling its valuation to $5 billion in <a class="gtmContentClick" data-vars-link-text="five months" data-vars-click-url="https://www.wsj.com/tech/ai/an-investor-dared-him-to-quit-school-now-hes-building-a-1-5-billion-ai-startup-d8663e72?st=UrQUgS&amp;reflink=desktopwebshare_permalink" data-vars-content-id="9e6668a2-a499-4453-a1b9-3af6bebcf92b" data-vars-headline="Factory to aggressively pursue acquisitions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.wsj.com/tech/ai/an-investor-dared-him-to-quit-school-now-hes-building-a-1-5-billion-ai-startup-d8663e72?st=UrQUgS&amp;reflink=desktopwebshare_permalink" target="_blank">five months</a>, CEO Matan Grinberg tells Axios Pro.Driving the news: The San Francisco-based company this week raised $200 million from Blackstone, Khosla Ventures, Sequoia Capital and Insight Partners.

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Factory to aggressively pursue acquisitions

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