Code Generation Startup Emerges From Stealth, Raises $227M

Code generation startup Augment has emerged from stealth with a $227 million series B raise to develop AI-powered code generation tools.

Founded in 2022, Augment builds AI coding assistance tools for developers. The startup claims its solutions “removes the toil in developers’ workdays, so teams can once again experience the joy of coding.”

Augment has raised a total of $252 million in funding, valuing the company at $977 million.

Index Ventures, Lightspeed Venture Partners and Eric Schdmit-founded Innovation Endeavors count among Augment’s investors.

The latest funding round will be put toward accelerating product development and supporting the company’s engineering and go-to-market efforts.

Companies using Augment’s solutions can connect their codebases, allowing their AI tools to privately interact with their data. Its solutions are designed to be secure, with the company stressing user intellectual property will be protected.

The startup was founded by former Microsoft software engineer Igor Ostrovsky and ex-Google AI researcher Guy Gur-Ari.

Its team includes former employees from companies such as Yahoo!, Shopify, Meta, Nvidia, Databricks and VMware.

Scott Dietzen, former CEO of Pure Storage, leads the company as CEO.

“As large language models emerged a few years ago, this team saw their potential to make programming dramatically more productive and yield much higher-quality software,” he said.

Related:AI Code Generation Models: The Big List

“Current AI for code platforms are falling well short of realizing the potential of generative AI, and we are thrilled to be launching a product to close this gap.”

Former Google CEO Eric Schmidt said Augment can improve software development by empowering developers.

“Software remains far too expensive and painful to develop,” Schmidt said. “AI is poised to transform coding and after surveying the landscape, we came away convinced that Augment has both the best team and recipe for empowering programmers and their organizations to deliver more and better software.”

Augment joins a market where code generation companies are facing challenges.

A rival startup Kite folded in 2022, citing monetization issues. And despite increasing user numbers, Microsoft's GitHub Copilot was losing an average of $20 a month per user last year.

Free-to-access applications like ChatGPT and Claude can generate code snippets while having the advantage of also being able to handle other tasks, like generating text.

Open source code generation models like Hugging Face’s StarCoder 2 can help developers with their coding issues and are free to run.

Related:Hugging Face Launches New Code Generation Models