(Bloomberg) -- A little over a year ago, Matan Grinberg was studying string theory for his physics Ph.D. Now, he’s a dropout with an AI startup valued at more than $100 million by investors such as Sequoia Capital.Grinberg is set to announce Tuesday that he has raised $15 million from Sequoia and other investors for Factory, a startup using AI to help businesses streamline coding tasks. To date, Factory has raised a total of $20 million, with other backers including Lux Capital and the chief executive officers of Hugging Face and Databricks Inc., as well as Los Angeles musical duo the Chainsmokers, through their venture arm.The company, officially called San Francisco AI Factory Inc., offers automated AI systems called Droids that help businesses generate software features, review code and solve bugs, among other engineering jobs. Factory started selling its products earlier this year, with customers including startups Bubble, Podium and Stord.Grinberg’s company joins an increasingly crowded market. Poolside AI, Magic AI and Cognition AI have each raised more than $100 million in funding to build artificial intelligence tools for software engineers. Grinberg considers GitHub Copilot, owned by Microsoft Corp., his biggest competition, but he said Factory’s technology works much better and more accurately on fully autonomous tasks.The funding also underscores the immense appetite from venture firms for all things AI. Some early AI startups are raising rounds every few months — and with much larger amounts than non-AI startups at similar stages of development. In that business climate, a string theory student like Grinberg with a promising idea can quickly land millions. 

“Some people might think, ‘What is this physicist doing here?’” he said. “It’s not lost on me.” Then he quickly rattled off a list of former physicists who have gone into tech. The list includes Amazon.com Inc. founder Jeff Bezos, who for a time studied physics at Princeton University, where Grinberg earned his undergraduate degree. Grinberg, 26, conceived of Factory after an April 2023 walk with Sequoia’s Shaun Maguire inspired him to think of startup ideas. He enlisted co-founder Eno Reyes, a friend and fellow Princeton graduate, who was then working as an engineer at AI startup Hugging Face. Days after the walk with Maguire, Grinberg presented to Sequoia partners. They greenlit an initial $1 million investment for the fledgling business. But before Grinberg formally pitched his company to Sequoia, he said he had to promise Maguire that he would work on the startup full time. Grinberg filed his paperwork for a leave of absence from the University of California at Berkeley the day before his Sequoia presentation and sent a screenshot. Maguire also happens to have studied physics, with a Ph.D. from the California Institute of Technology. 

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