Ollama, an open-source AI developer tool, has raised $65 million from Benchmark and now serves nearly 9 million users. The tool enables developers to run AI models locally on their PCs.
SynthePulse Insight · AI deep reading
Version 1 · 1 source
Ollama completes $65 million Series B funding, with nearly 9 million monthly active users, but its shift from free open-source to cloud services has sparked community concerns about 'enshittification.'
Ollama announced the completion of a $65 million Series B funding round led by Theory Ventures. Previously, the company secured a $15 million Series A led by Benchmark, bringing total funding to $88 million. CEO Jeff Morgan said the funds will be used to expand cloud services and support growing user demand.
Ollama was founded in 2023 by former Docker executives Jeff Morgan and Michael Chiang, who previously co-founded Kitematic, which was acquired by Docker. Their experience made Ollama the 'Docker of AI'—abstracting underlying hardware configurations so developers can quickly run open-source models on personal computers. Currently, Ollama serves 8.9 million developers monthly, covering 85% of Fortune 500 companies, yet the team has only 14 people.
Benchmark's Peter Fenton invested in the Series A and joined the board, noting that Morgan and Chiang's experience providing tools to over 10 million developers at Docker was key to his bet. He believes the ability to create products widely used by developers is extremely rare.
Ollama's rise coincides with the intensifying debate between open-source and closed-source models. Jeff Morgan observed that by early 2026, open-source models like OpenClaw began to handle agent tasks such as programming, and enterprise users started shifting to more economical open-source models to reduce high inference costs. Peter Fenton emphasized that it's not a 'binary choice,' but every company with high inference costs has 'mission-critical projects' driving migration to open-source models.
Ollama's cloud service offers subscription tiers from free to $100 per month, billed by GPU time rather than tokens, designed to help developers run large models that cannot be hosted locally. This strategy directly targets enterprise-level inference needs, but some open-source community users question whether it deviates from the original free project—a year ago, blog posts and social media articles accused Ollama of showing signs of 'enshittification.'
But Morgan argues that cloud services are an extension of the open-source mission: helping developers discover and use models, including those 'too large to run locally.' Fenton also reassured the community, stating that the free desktop core product 'has not changed at all.'
Ollama has 176,000 stars and nearly 17,000 forks on GitHub, making it a star project among open-source AI tools. However, when the company began monetizing through cloud services, some loyal users felt disappointed, believing that commercial interests would divert attention from the open-source project. This tension is not uncommon in developer tools, but Ollama's case highlights the typical strains in the growth of open-source projects.
Morgan and Fenton both declined to disclose the company's revenue and valuation, but emphasized strong user growth. Notably, enterprise customers (especially in finance and technology) have become Ollama's core paying group, forming a complementary ecosystem with its free desktop product. However, future adjustments in cloud service pricing and technical roadmap remain key to whether it can maintain community trust.
Ollama is not alone—projects like Inferact (vLLM), RadixArk (SGLang), and Arcee are also raising funds and commercializing, as the AI field spawns a wave of startups growing from open-source projects. Ollama's path may become a bellwether for this trend.
This article is based on a TechCrunch interview with founder Jeff Morgan and investor Peter Fenton. Key metrics such as user data and funding amounts come from company statements and have not been independently verified. Team size and revenue information were provided by the founder.
Ollama's successful funding validates the commercial potential of open-source AI developer tools, but the balance between its cloud service transformation and community values will determine whether it can become a long-term sustainable platform.
Primary report
Primary source