Magic, a pioneering U.S. startup specializing in AI-powered software development, is in advanced discussions to raise over $200 million in its latest funding round, aiming to achieve a valuation of $1.5 billion. This significant funding round comes just months after its previous capital raise.
Since its founding in 2022 by Eric Steinberger and Sebastian De Ro Magic has raised $140 million in total funding, with support from notable backers such as NFDG Ventures and Alphabet’s CapitalG. The startup, which employs approximately 20 people, has been instrumental in advancing generative AI technologies tailored for software development tasks.
Sources familiar with the matter revealed that investors, including prominent firms like Jane Street, are poised to participate in this funding round, which could potentially triple Magic’s valuation from its last round earlier this year. Despite currently generating no revenue and having no products available for sale, Magic has garnered substantial investor interest due to its innovative approach in AI coding.
Magic’s ambitious plans include further enhancing its AI models capable of processing extensive contextual data, surpassing conventional transformer models utilized by other large language models in the market. This strategic focus aims to position Magic at the forefront of AI-driven software development tools, capitalizing on the increasing demand for efficient coding solutions within the tech industry.
The success of GitHub Copilot and similar products has underscored the market potential for AI coding assistants, prompting significant investor confidence in Magic’s growth prospects. With its latest funding round, Magic aims to bolster its technological capabilities and expand its market presence, aiming to lead innovation in the AI coding landscape.
Magic declined to comment on the funding round, while Jane Street did not respond to requests for comment, highlighting the confidentiality surrounding ongoing negotiations in the private investment domain.