Popular open source AI developer tool Ollama raises $65M, grows to nearly 9M users

Ollama, a rising star in the open source AI landscape, has successfully raised $65 million in a Series B funding round led by Theory Venture. This recent influx of capital follows an earlier Series A round where the company secured $15 million under the guidance of Benchmark’s Peter Fenton. With this latest funding, Ollama has raised a total of $88 million since its inception in 2023. The tool has gained immense popularity among developers, enabling them to deploy open-weight AI models directly on their PCs within minutes. This convenience has earned Ollama rave reviews across various training platforms, social media, and developer communities. The platform boasts an impressive GitHub presence with 176,000 stars and nearly 17,000 forks. Ollama provides developers with easy access to a variety of models, including larger, more complex ones hosted on its neocloud, through different subscription tiers ranging from free to $100 per month. Unlike many competitors, Ollama's model tracking is based on GPU time rather than token limits, giving developers more flexibility. The founders, Jeff Morgan and Michael Chiang, previously contributed to Docker Desktop, which revolutionized the way cloud applications are managed. Morgan noted that while open models emerged in 2023, they were often challenging for developers to implement, being primarily geared towards researchers. Ollama aims to simplify this process, now boasting nearly 9 million monthly users, including clients from 85% of Fortune 500 companies, all with a lean team of just 14 employees. Peter Fenton, who led the earlier investment round, expressed confidence in the duo's ability to create impactful tools for developers, stating that their prior work with Docker has already benefited millions. Although specific revenue figures and valuation details remain undisclosed, Morgan indicated that Ollama's business gained traction around January when larger open models began to demonstrate their utility in tasks such as coding, following the rise of AI assistants like OpenClaw. As the industry shifts towards open models, particularly among enterprises looking to manage costs, Ollama’s cloud offerings are positioned favorably. Fenton emphasized that the market can support both open and closed AI models, suggesting robust prospects for Ollama as more businesses recognize the advantages of open-weight models. Despite some backlash from users who feel that the focus on cloud services detracts from the core free product, Morgan defends this evolution as a means to further the company’s mission. He explained that many advanced models are too large for personal computers, prompting Ollama to offer solutions for additional computational power while maintaining the free desktop experience. Fenton reassured users that the core product remains unchanged and continues to serve as a vital resource for discovering and utilizing local models effectively.