Factory CEO Accuses Advisor of Leaking to Cognition

Factory CEO Matan Grinberg said in a post on X on Wednesday that he fired Chris Degnan from his role as a board advisor, alleging that Degnan shared confidential information with Factory's biggest competitor, Cognition. Grinberg said he fired Degnan from the board on Tuesday.

Two hours after Grinberg's post, Degnan announced on X and LinkedIn that he had joined Cognition as chief revenue officer. In his post, Degnan said RPT Ventures and managing partner Chad Peets will now work with Cognition. The facts do not clarify whether Degnan meant RPT Ventures or RPT Partners, the Newport Beach, California-based investor in Factory where he spent the last five months as a partner.

Grinberg said Degnan had earlier admitted to a 'casual' conversation with a Cognition executive but assured him he had no interest in working for the competitor. On Monday, Degnan apparently disclosed that he had actually been in ongoing talks with Cognition, according to Grinberg.

Factory is a three-year-old San Francisco-based agentic coding startup whose AI agents can carry out programming tasks largely on their own. This month, it raised $200 million at a $5 billion valuation from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners and others. Its customers include Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe, and T-Mobile.

Cognition, maker of the Devin coding agent, raised another $2 billion at a $48 billion valuation earlier this month and counts Mercedes-Benz, NASA, Goldman Sachs, and Citi as customers. Grinberg said he sees Cognition as his biggest competitor.

Degnan was Snowflake's first sales hire and later spent 11 years as the data company's chief revenue officer. He has been a go-to-market advisor to startups for Iconiq since October of last year. The dispute comes as Andreessen Horowitz is reportedly the subject of a Justice Department probe into its partners serving on competitors' boards, according to techcrunch.com.