Ollama Secures $65M Series B to Democratize Open AI Models
The popular open-source AI developer tool Ollama has raised a $65 million Series B round led by Theory Ventures, as revealed exclusively by founder and CEO Jeff Morgan to TechCrunch. This funding follows a previous $15 million Series A led by Benchmark’s Peter Fenton, bringing the company’s total raised to $88 million.
Funding Details and Background
Ollama, which launched in 2023, enables developers to run open-weight AI models on their personal computers, often getting them operational within minutes. The tool has garnered significant community support, amassing 176,000 stars and nearly 17,000 forks on GitHub. Developers can also use Ollama to discover models and access larger, more complex ones hosted on its neocloud via subscription tiers ranging from free to $100 per month. Usage is tracked based on GPU time, not token limits.
From Docker to Ollama: A Proven Team
Founders Jeff Morgan and Michael Chiang previously built Docker Desktop, later joining Docker after it acquired their startup Kitematic. Docker’s containers abstract hardware configurations, making cloud apps portable. Similarly, Ollama performs for AI what Docker and Docker Desktop did for cloud computing. “Open models started coming out in 2023 but they were really hard to use,” Morgan said, explaining that models were initially geared toward researchers, not programmers. “As a result, it was really hard to get them up and running.”
Massive Developer Adoption and Enterprise Reach
Usage Metrics and Growth
Three years after launch, Ollama is now “used by over 8.9 million developers every month, sitting in 85% of the Fortune 500 and growing like crazy,” Morgan stated—all with only 14 employees. Benchmark’s Peter Fenton, who led the earlier round and joined the board, noted, “What Jeff and Michael built with Docker is being used by 10 million-plus developers every day. The creative powers to create a product that goes to ubiquity for developers is extremely rare.”
Business Model and Monetization
Morgan and Fenton declined to discuss revenues or valuation, but Morgan identified a proving point around January when OpenClaw became hot. That enabled larger open models to perform agentic tasks like coding, leading to an explosion of assistants like OpenClaw. Since then, the industry has debated whether enterprises will shift from closed models (e.g., Anthropic)) to more affordable open models. Fenton argues it’s not an either/or scenario: both will thrive, but high inference costs push companies toward open-weight models. “Every company with high inference expenses has a vital existential project pushing them to move to open-weight models,” he said.
The Open vs. Closed Source AI Debate
Addressing Community Concerns
Not all Ollama fans have embraced the company’s pursuit of profitability. About a year ago, accusations of “enshittification” arose when some users complained that its cloud business was diverting attention from the free project. However, Morgan sees the cloud service as an evolution of the open-source mission: “Those state-of-the-art, large, open models are often too big to run on your own computer. So we said, ‘Hey, let’s help find the compute for that.’” Board member Fenton added, “Nothing has changed for the core product that’s free on the desktop. There’s zero change to the premise that this is the place you can discover and run local models.”