Anysphere, the maker of coding tool Cursor, raised $900 million in a new round of funding that values the San Francisco-based company at $9 billion.
Thrive Capital led the round, and there was participation from Andreessen Horowitz and Accel, the Financial Times reported Monday (May 5).
In a prior round four months ago, Anysphere raised $105 million, also from Thrive and Andreessen Horowitz. That round valued the startup at $2.5 billion, the report said.
The nine-fold increase in the current round was due to annual recurring revenues (ARR) increasing quickly, according to the report. In April, Anysphere posted an ARR of about $200 million.
Cursor lets developers use natural language to tell the AI what they want to make instead of having to write code manually and autocomplete updates. Users include engineers at OpenAI, Perplexity, Stripe, Instacart, Shopify and Johnson & Johnson, among others.
“Our approach is to build the engineer of the future: a human-AI programmer that’s an order of magnitude more effective than any one programmer,” company founders Aman Sanger, Sualeh Asif, Michael Truell and Arvid Lunnemark said on the company’s website.
Read also: Report: OpenAI in Talks to Acquire AI-Powered Coding Tool Windsurf
OpenAI was looking into acquiring Anysphere, but the latter was growing so quickly that it wasn’t interested, TechCrunch reported April 22. Anysphere’s revenue has been doubling on average every two months.
Instead, OpenAI this week acquired Windsurf, which developed an AI-powered code editor, for about $3 billion, Bloomberg reported Monday.
AI for coding has been one of the most popular use cases because of productivity gains. For example, Amazon CEO Andy Jassy said on social platform X last year that the company has saved 4,500 developer years of work and $260 million yearly from using its own AI coding tool, Amazon Q Developer.
One of the most tedious (but critical tasks) for software development teams is updating foundational software. It’s not new feature work, and it doesn’t feel like you’re moving the experience forward. As a result, this work is either dreaded or put off for more exciting work—or… pic.twitter.com/MJvsqNxgiT
— Andy Jassy (@ajassy) August 22, 2024
Another AI coding tool is GitHub Copilot, and many AI chatbots, such as ChatGPT, Gemini, Claude, Perplexity, Meta and others, also have coding capabilities.
Meanwhile, funding into AI startups like Anysphere continues to see gains.
This week, Google Brain founder Andrew Ng said in a blog post that his AI Fund has raised $190 million in an “oversubscribed” round.
Ng said in the post that his fund isn’t like traditional venture capital firms. It is a “venture builder” that will co-found AI companies. Its team will be directly involved in “writing code, talking to customers to get feedback, iterating on product designs, preparing market analyses and so on.”
Many factors go into the success of a startup,” Ng said in the post. “But if I had to pick just one, it would be speed. Startups live or die based on their ability to make good decisions and execute fast.”
For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.
