Ollama raises $65M Series B, grows to nearly 9M users

Ollama has raised a $65 million Series B led by Theory Ventures and says the open source developer tool is now used by over 8.9 million developers every month and sits in 85% of the Fortune 500. The company has raised $88 million in total after a prior $15 million Series A led by Benchmark’s Peter Fenton.

What did Ollama announce?

Ollama announced a $65 million Series B led by Theory Ventures, bringing its total funding to $88 million after a $15 million Series A led by Peter Fenton. The startup, which launched in 2023, reports 8.9 million monthly developer users, presence in 85% of the Fortune 500, and a team of 14 employees.

The round follows rapid user growth and community traction: Ollama’s GitHub repository has 176,000 stars and nearly 17,000 forks. Jeff Morgan, founder and CEO, told the outlet the company declined to disclose revenues or a new valuation.

How does Ollama work and how does it make money?

Ollama helps developers run open-weight AI models on their local PCs and also hosts larger models on its cloud, offering subscription tiers from free to $100 per month and tracking usage based on GPU time rather than token limits. The desktop tool aims to get models running in minutes, while the cloud service provides the compute for models that are “too big to run on your own computer.”

Founders Jeff Morgan and Michael Chiang previously helped build Docker Desktop after Docker acquired their earlier startup, Kitematic. The article characterizes Ollama as doing for AI what Docker and Docker Desktop did for cloud, by abstracting away hardware configuration so developers can focus on building.

How did Ollama’s rise happen and what triggered enterprise interest?

Open models started appearing in 2023 but were hard to use, Morgan said, and a tipping point came around January when an assistant called OpenClaw gained popularity and larger open models began performing agentic tasks such as coding. That shift made open models more practical for daily work and increased demand for tooling and hosted compute.

Investors see a market where companies with high inference expenses are motivated to move to open-weight models. Peter Fenton said the debate is not binary — "It’s not an either/or" — and argued there will be business for both open and closed models while many firms pursue open alternatives to reduce inference cost.

Why it matters

Ollama’s funding and metrics matter because they show an open source developer tool can scale into a paid cloud business while keeping a widely used free desktop product. The combination of large developer adoption (8.9 million monthly users), deep enterprise penetration (85% of the Fortune 500), and a monetization path tied to GPU time positions Ollama at the intersection of local-first tooling and hosted compute for oversized models.

The company also exemplifies a broader trend: open source AI projects spawning venture-backed companies that provide inference and hosting services for open models, as seen with other projects and inference providers named in the article.

What to watch

Watch whether Ollama discloses revenues or a valuation, details Morgan and Fenton declined to share, and whether paying enterprise customers shift more inference volume to Ollama’s cloud. Also monitor how the community responds if cloud growth changes priorities for the free desktop product, a point that previously prompted criticism about attention moving away from the open project.