AI coding assistant Cursor, developed by Anysphere, has raised $100 million in a Series B funding round, sources confirmed. Thrive Capital, a returning investor, led the round, which values the company at $2.6 billion post-money. This comes just four months after the company’s $60 million Series A at a $400 million valuation, marking a 6.5-fold increase in its valuation over a short span.
Andreessen Horowitz (a16z), which co-led the Series A, also participated in the Series B but did not take a leading role this time. While Thrive declined to comment, Anysphere and a16z did not respond to requests for comment.
The rapid growth and valuation leap highlight the competitive interest in Anysphere, with insiders closely monitoring the funding landscape. Last month, reports indicated that prominent investors like Index Ventures and Benchmark were eager to back the company. However, Thrive doubled down on its investment, signaling confidence in Anysphere’s trajectory.
Cursor’s Market Position and Revenue Growth
Cursor operates in a crowded space for AI coding assistants, competing with products like Augment, Codeium, Magic, and Poolside. It also faces competition from Microsoft’s GitHub Copilot, which recently upped the ante by launching a free version. Despite this, Cursor has gained significant traction with developers, boasting clients like OpenAI, Shopify, and Instacart.
The company’s financials reflect its momentum. In April, Anysphere reported an annualized recurring revenue (ARR) of $4 million. By October, its revenue reached $4 million monthly, translating to $48 million ARR. The latest funding round values Anysphere at over 50 times its revenue, although the exact multiple may be slightly lower due to continued growth.
Cursor’s freemium model includes a two-week free trial, followed by tiered subscriptions. Users can choose between a $20 monthly pro plan or a $40 business plan tailored for teams.
Founding and Early Backing
Anysphere was co-founded in 2022 by a group of MIT students: Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger. Early support came from OpenAI’s accelerator program and the OpenAI Startup Fund, which led its seed round. Other notable backers include Stripe co-founder Patrick Collison, former GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi.
As the AI coding assistant market evolves, Anysphere’s growth trajectory and ability to attract high-profile investors position it as a key player to watch.
Featured image courtesy of Gary A. Stafford – Medium
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