Open Source AI Tool Ollama Raises $65 Million Series B
Ollama, the open source AI developer tool that lets programmers run AI models on their local machines, raises $65 million in a Series B round led by Theory Ventures. The funding follows a $15 million Series A led by Benchmark's Peter Fenton, bringing total funding to $88 million. Founder and CEO Jeff Morgan says the company now reaches 8.9 million monthly developers and operates in 85% of the Fortune 500 — all with a team of just 14 employees.
The founders bring deep experience to the project. Morgan and co-founder Michael Chiang previously help build Docker Desktop after Docker acquired their earlier startup, Kitematic. Ollama applies the same philosophy that makes Docker ubiquitous — abstracting away complex configuration — to running open-weight AI models. What once requires deep technical knowledge for researchers now takes developers minutes to set up.
Ollama offers both local model execution and hosted access to larger models through subscription tiers ranging from free to $100 per month, billing by GPU time rather than token limits. Morgan points to early 2025 as a turning point, when open models gain the ability to handle real agentic tasks like coding. That shift drives rapid growth and validates Ollama's business model as demand for accessible open source AI accelerates.