Popular open source AI developer tool Ollama raises $65M, grows to nearly 9M users
Key Takeaways
- Ollama has raised a $65 million Series B led by Theory Ventures, bringing its total funding to $88 million, according to TechCrunch.
- The open source tool now has almost 9 million monthly developers, 176,000 GitHub stars and nearly 17,000 forks, TechCrunch reported.
- Founder Jeff Morgan says Ollama is used in 85% of Fortune 500 companies, run by a team of just 14 people.
What Ollama Does and Why Investors Are Paying Attention
Ollama is an open source tool that lets developers run open-weight AI models directly on their own computers rather than relying solely on cloud-hosted services. According to TechCrunch, the company launched in 2023 and was built specifically to solve a problem that early open models created: they were designed for researchers, not working programmers, making them cumbersome to install and operate. Ollama’s pitch was to make that process take minutes instead of hours.
That simplicity appears to have translated into rapid adoption. TechCrunch reports that Ollama is now used by over 8.9 million developers every month and has accumulated 176,000 stars and nearly 17,000 forks on GitHub, both common measures of popularity and engagement within open source communities. Founder and CEO Jeff Morgan also told TechCrunch that Ollama sits inside 85% of Fortune 500 companies, a striking penetration rate for a tool run by a team of only 14 employees.
The new $65 million Series B was led by Theory Ventures, TechCrunch reported, and follows an earlier $15 million Series A led by Peter Fenton of Benchmark, who joined Ollama’s board. Combined, the company has now raised $88 million. Morgan and Fenton declined to disclose Ollama’s revenue or its current valuation to TechCrunch.
From Free Tool to Business Model — and Why That Matters
Ollama’s founders are not newcomers to developer tooling. TechCrunch notes that Morgan and co-founder Michael Chiang previously worked on Docker Desktop, having joined Docker after it acquired their earlier startup, Kitematic. Docker’s core innovation was making it easy to move cloud applications between environments without wrestling with hardware configuration. TechCrunch frames Ollama’s mission as doing something similar for AI: abstracting away the technical friction of running models locally.
That pedigree is part of what drew Fenton to back the company early, he told TechCrunch, pointing to Docker’s reach among more than 10 million daily developers as evidence that Morgan and Chiang know how to build tools that achieve broad, sustained usage.
Beyond its free desktop tool, Ollama also operates a paid cloud service, letting developers access larger, more complex models hosted on what TechCrunch describes as Ollama’s own “neocloud.” Subscriptions range from free up to $100 a month, and usage is billed based on GPU time rather than the token-based pricing common among many AI providers. Morgan told TechCrunch that this business side gained real traction around January, when interest in agentic AI tools such as OpenClaw surged and open models proved capable of handling coding and other complex tasks — demonstrating, in his view, that open-weight systems could do meaningful work rather than serving as a cheaper fallback.
This shift matters for anyone tracking the broader AI economy: TechCrunch reports that Fenton sees rising inference costs pushing companies with heavy AI usage toward open-weight models almost as a matter of necessity, even as he stresses this is not a zero-sum contest between open and closed systems. Ollama is presented in the source article as one entry in a wider wave of open source AI infrastructure projects — including inference tools like vLLM and SGLang, agentic frameworks like OpenClaw and NanoClaw, and model-building startups like Arcee — that are increasingly attracting venture capital. For markets watching AI infrastructure spending, this signals continued investor appetite for tools that reduce the cost of running AI, a trend that indirectly touches adjacent sectors, including crypto-linked AI infrastructure and compute markets, where lower-cost inference options can influence how capital is allocated.
Not everyone in Ollama’s community has welcomed its commercial expansion. TechCrunch notes that roughly a year ago, some developers voiced concern on blogs and social media that the cloud business was distracting from the free, open source project, invoking the broader “enshittification” critique sometimes leveled at developer tools that add paid layers over time. Morgan pushed back on that framing in comments to TechCrunch, describing the cloud offering as a natural extension of Ollama’s original goal: helping developers find and run models, including very large ones too resource-intensive for a personal computer. Fenton echoed that view, telling TechCrunch that the free desktop product remains fully intact and that Ollama’s core function — discovering and running models locally — has not changed.
Hype Check
Claim: Ollama’s funding and user numbers signal that open-weight AI models are decisively overtaking closed models for everyday enterprise use. Reality: TechCrunch reports genuinely large adoption figures — nearly 9 million monthly developers, 85% Fortune 500 presence, and $88 million raised in total — but Fenton himself told TechCrunch this is not an either/or shift, and both open and closed models are expected to coexist. Revenue and valuation figures were not disclosed, limiting how far the business case can be verified. Verdict: Substance, with some claims still unverifiable pending disclosed financials. This is not financial advice.
Source
Researched with AI assistance, fact-checked and edited by a human. Not financial advice.