AI coding startup Poolside raises $500M from eBay, Nvidia, and others

Kyle Wiggers October 2, 2024

Collected at: https://techcrunch.com/2024/10/02/ai-coding-startup-poolside-raises-500m-from-ebay-nvidia-and-others/

Poolside, the AI-powered software dev platform, has raised half a billion dollars in new capital.

The cash came in the form of a Series B led by Bain Capital Ventures, which also had participation from a who’s who of Big Tech firms, including eBay (via eBay Ventures) and Nvidia. It brings Poolside’s total raised to $626 million; Bloomberg reports that the startup’s valuation now sits at $3 billion.

TechCrunch revealed in June that Poolside was in the midst of raising more than $400 million in funding, with Bain Capital in talks to co-lead the round.

U.S.- and Europe-based Poolside was founded last year by CEO Jason Warner and Eiso Kant, both software engineers. Warner is the former CTO of GitHub, having also headed engineering orgs at Canonical and Heroku. Kant previously co-founded several dev-focused startups, including engineering analytics firm Athenian.

Warner, who incubated GitHub’s AI-powered Copilot tool, met Kant in 2017. Over the next six years, the pair plotted an AI-driven assistive tool suite for devs, which became Poolside.

Poolside develops its own AI models to help with tasks like autocompleting code and suggesting code possibly relevant to a particular context or codebase — much like rival AI assistive coding tools. The company’s customers are primarily Global 2000 companies and public-sector agencies; few have been publicly disclosed.

The Series B funding allowed Poolside to bring 10,000 Nvidia GPUs online to train future models, Warner said, and will bolster the company’s go-to-market and R&D efforts.

Despite the security, copyright, and reliability concerns around AI-powered assistive coding tools, developers have shown enthusiasm for them, with the vast majority of respondents in GitHub’s latest poll saying that they’ve adopted AI tools in some form. GitHub reported in April that Copilot had over 1.8 million paying users and more than 50,000 business customers.

Encouraged by the adoption trend, VCs are pouring massive sums of cash into AI coding startups. Generative AI coding firm Magic landed $320 million in August — the same day GitHub Copilot competitor Codeium closed a $150 million fundraising round. Earlier in August, Cognition, best known for its viral coding assistant Devin, secured $175 million at a $2 billion valuation.

Polaris Market Research projects that the AI coding tools market could be worth $27 billion by 2032. At this rate, that doesn’t seem terribly far-fetched.

LG Technology Ventures, Felicis Ventures, Redpoint Ventures, Citi Ventures, Capital One Ventures, HSBC Ventures, DST Global, StepStone Group, Schroders Capital, Premji Invest, Dorsal Capital, BAM Elevate, Adams Street, and Fin Capital also invested in Poolside’s Series B.