Anysphere, the company behind the AI-powered coding assistant Cursor, has raised $100 million in Series B, giving it a post-money valuation of $2.6 billion, according to sources familiar with the deal. The round was led by returning investor Thrive Capital, the person said.
This new funding comes just four months after Anysphere raised a $60 million Series A from Thrive and Andreessen Horrowitz at a valuation of $400 million. A16Z also participated in the latest round, but this time it was not a co-lead.
Thrive declined to comment, and the company and a16z did not respond to requests for comment.
Last month, TechCrunch reported that investors including Index Ventures and Benchmark were passing up the opportunity to back the company. But apparently Anysphere is growing so fast that existing VCs are willing to bet against it, even at a staggering 6.5x jump in valuation compared to a round completed just a few months ago. I couldn't pass up the opportunity to double my money. The interest in backing the company and who would get the deal has been widely noted among Valley insiders and flagged by an X account called Arfur Rock.
The market for AI-powered coding assistants is crowded with options like Augment, Codeium, Magic, and Poolside. This is because AI is one of the areas where AI can generate solid returns. None of these tools are as popular with developers as Cursor, but it also follows Microsoft's GitHub Copilot, which upped the ante by releasing a free version.
Still, Anysphere's revenue has increased from $4 million in annual recurring revenue (ARR) in April to $4 million per month in October, sources previously told TechCrunch. This means the company's October ARR was $48 million, meaning Anysphere was valued at more than 50 times revenue in the latest round. (However, if the company's rapid revenue growth continues, the final deal could have a slightly lower valuation multiple.)
Cursor offers developers a freemium model with tiered pricing. After a two-week free trial, the company converts users into paying customers who pay $20 a month for professional services or $40 a month for a business subscription designed for large teams and organizations. Companies using Cursor include OpenAI, Midjourney, Perplexity, Replicate, Shopify, and Instacart.
Anysphere was co-founded in 2022 by Michael Truell, Sueleh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT. Last year, the company went through the OpenAI accelerator and raised seed funding led by the OpenAI Startup Fund.
Other investors in the company include venture firm Neo, Stripe co-founder Patrick Collison, former GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi.