Cursor AI Raises $100M at $2.6B Valuation

Anysphere Secures $100 Million in Series B Funding

Anysphere, the company behind the AI-powered coding assistant Cursor, has successfully raised $100 million in a Series B funding round. Sources familiar with the transaction indicate a post-money valuation of $2.6 billion.

This latest investment is spearheaded by Thrive Capital, a returning investor in Anysphere. The funding arrives only four months following the completion of Anysphere’s $60 million Series A round.

Rapid Growth and Investor Interest

The Series A round, valued at $400 million, was previously led by Andreessen Horowitz (a16z), with Thrive Capital also participating. a16z also contributed to the current Series B funding.

Representatives from Thrive Capital have declined to provide comment. Requests for comment directed to Anysphere and a16z have not yet received a response.

Recent reports highlighted significant investor competition for the opportunity to support Anysphere. Index Ventures and Benchmark were among those keenly interested in backing the company.

However, Anysphere’s rapid expansion prompted existing investors to increase their commitment. This resulted in a substantial 6.5x valuation increase compared to the Series A round completed just months prior.

Competitive Landscape and Revenue Performance

The market for AI coding assistants is becoming increasingly competitive. Several options are available, including Augment, Codeium, Magic, and Poolside.

Despite this competition, Cursor has emerged as a particularly popular tool among developers. It is also positioned as a challenger to Microsoft’s GitHub Copilot, which recently introduced a free version.

Anysphere has demonstrated impressive revenue growth. The company’s annualized recurring revenue (ARR) increased from $4 million in April to $4 million monthly by October.

This translates to an October ARR of $48 million, suggesting the Series B round valued Anysphere at over 50 times its revenue. Continued revenue growth likely resulted in a slightly lower final valuation multiple.

Cursor’s Pricing and Client Base

Cursor operates on a freemium model, offering tiered pricing plans. Users can access a two-week free trial before subscribing.

Paid subscriptions are available at $20 per month for a Pro plan or $40 per month for a Business plan, designed for larger teams and organizations.

Notable companies utilizing Cursor include OpenAI, Midjourney, Perplexity, Replicate, Shopify, and Instacart.

Company Origins and Key Investors

Anysphere was founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger, all while students at MIT.

The company participated in OpenAI’s accelerator program last year and secured seed funding led by the OpenAI Startup Fund.

Additional investors include venture firm Neo, Stripe co-founder Patrick Collison, former GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi.

Correction

A previous version of this article incorrectly stated that Thrive Capital co-led Anysphere’s Series A funding round. The round was led by Andreessen Horowitz (a16z).