Anysphere's Cursor AI Coding Assistant Secures $900M Funding, Reaches $9.9B Valuation

Cursor's Anysphere nabs $9.9B valuation, soars past $500M ARR | TechCrunch

Anysphere, the maker of AI coding assistant Cursor, has raised $900 million at a $9.9 billion valuation, Bloomberg reported. The round was led by a returning investor Thrive Capital, with participation from Andreessen Horowitz, Accel and DST Global. The massive round is Anysphere's third fundraise in less than a year. The three-year-old startup secured its previous capital haul of $100 million at a pre-money valuation of $2.5 billion late last year, as TechCrunch was first to report. AI coding assistants, often referred to as 'vibe coders,' have emerged as one of AI's most popular applications, with Cursor leading the category. Anysphere's annualized revenue (ARR) has been doubling approximately every two months, a person familiar with the company told TechCrunch. The company has surpassed $500 million in ARR, sources told Bloomberg, a 60% increase from the $300 million we reported in mid-April. Cursor offers developers tiered pricing. After a two-week free trial, the company converts users into paying customers, who can opt for either a $20 pro-offering or a $40 monthly business subscription. Until recently, the majority of the company's revenue came from individual user subscriptions, Bloomberg reported. However, Anysphere is now offering enterprise licenses, allowing companies to purchase the application for their teams at a higher price point. Earlier this year, the company was approached by OpenAI and other potential buyers, but Anysphere turned down those offers. The ChatGPT maker bought Windsurf, another fast-growing AI assistant reportedly for $3 billion.

Anysphere, Hailed as Fastest Growing Startup Ever, Raises $900 Million

The artificial intelligence rush has enabled some small startups to grow very big very quickly. But by some estimates, none have grown as fast as Anysphere Inc., maker of the popular AI coding assistant Cursor, which has surpassed $500 million in annualized revenue, the company said. Now, the three-year-old startup has raised $900 million to help drive that growth, Anysphere plans to announce on Thursday. That will bring its valuation to $9.9 billion, including the new capital, underscoring investor enthusiasm for what Silicon Valley sees as one of most promising applications of generative AI thus far.

Anysphere raises $900M for its AI-powered Cursor code editor - SiliconANGLE

Confirming recent rumors, code editor startup Anysphere Inc. today announced that it has closed a $900 million funding round. OpenAI backer Thrive Capital led the raise. It was joined by several other institutional investors including Andreessen Horowitz, Accel and DST Global. Bloomberg reported that Anysphere is now worth $9.9 billion, nearly four times what it was worth after its previous funding round in December. The valuation increase reflects the company's rapid sales growth. Anysphere has reportedly reached $500 million in annualized recurring revenue three years after launching. According to Bloomberg, the company's investors estimate that this milestone makes it the fastest-growing software startup of all time. Anysphere offers a popular code editor called Cursor that uses artificial intelligence to automate programming tasks. An embedded chatbot allows developers to generate code, ask for technical explainers and perform related tasks. The software processes user requests using more than a half dozen large language models. Many of Cursor's features are designed to reduce the number of interruptions that developers experience while writing code. Cursor is based on VS Code, one of the most popular open-source code editors on the market. As a result, developers can bring over keybindings from their existing VS Code environments. Keybindings are user-defined keyboard shortcuts that speed up tasks such as jumping to the start of a code file. Cursor also works with VS Code extensions. Many programming tasks require developers to change the configuration of their workstations or download new software. Those tasks are performed using terminal commands, short code snippets inputted into a computer's operating system. Using Cursor, developers can describe the task they wish to perform in natural language and have an AI model generate the corresponding terminal command. The code editor also functions as a kind of spell checker. It can automatically spot and correct mistyped characters, which removes the need for developers to interrupt their workflow in order to perform troubleshooting. Mistyped characters render the code file that contains them unusable, which makes them fairly easy to detect. Developers spot the issue as soon as they attempt to run the file. According to Anysphere, Cursor can also spot more subtle bugs that don't render a code snippet unusable but lead to unexpected behavior or slow performance. The company makes money by selling paid versions of its software. A Pro plan provides access to higher usage limits for $20 per month. There's also an Enterprise tier, which offers an expanded set of user management and cybersecurity features for $40 per month.

The Fastest-Growing Startup Ever Just Surpassed $500 Million in Annual Revenue. Here's Why It Keeps Growing, According to Its CEO.

Anysphere CEO Michael Truell attributes the growth to "the value" the company's AI assistant offers developers. The AI boom has led to fast-growing startups like OpenAI, which raised a record $40 billion at a $300 billion valuation in April, and Perplexity, which processed 780 million user queries last month. However, investors claim that no AI startup has grown as rapidly as Anysphere, the three-year-old company behind popular AI coding assistant Cursor. In January, Anysphere became the fastest-growing company to hit $100 million in annual revenue, reaching the milestone in 14 months. Cloud security company Wiz, which hit $100 million in revenue in 18 months, held the previous record. Anysphere is the fastest-growing startup of all time, according to its investors. In the past few months, the startup has kept growing at a rapid pace. Anysphere announced on Thursday that it had exceeded $500 million in annual revenue and raised $900 million. More than a million people use its technology every day, the company stated. The new funding round gives Anysphere a $9.9 billion valuation. The startup's previous valuation was $2.5 billion in January, per Bloomberg. Related: This AI Startup Spent $0 on Marketing. Its Revenue Just Hit $200 Million in March. So what's the secret behind Anysphere's growth? Anysphere CEO Michael Truell told Bloomberg this week that it boils down to "the value" that the company offers. Since its launch, Anysphere's Cursor AI tool has become popular for its ability to finish lines of code and generate new code based on prompts. Cursor also acts like a spell check for code, automatically correcting errors so that developers save time. It can explain technical concepts and make recommendations to improve code quality. "I think a lot of the excitement comes from the value that this tech is giving to developers," Truell told Bloomberg. Cursor is one tool developers are using to "vibe code," or to prompt AI into writing code instead of writing it out manually. Google CEO Sundar Pichai said earlier this week that he used Cursor to help "vibe code" a webpage. Related: 'The Coolest Piece of Technology the World Has Ever Seen': OpenAI Is Acquiring Former Apple Designer Jony Ive's Startup for $6.4 Billion Anysphere makes most of its revenue from Cursor subscriptions, which range from $20 a month for a pro account to $40 per user per month for a business account. Cursor also has a free tier, which includes a two-week trial of its pro plan and up to 200 code completions a month. Paying individuals made up most of Anysphere's revenue until recently, when the balance shifted to businesses. Late last year, the startup hired its first salespeople to market its technology to enterprises, and the effort has paid off. More than half of Fortune 500 companies are now using Cursor in some capacity, according to Bloomberg. Cursor isn't the only coding assistant available, competing with billion-dollar startup Replit and the $3 billion startup Windsurf, but it differentiates itself from competitors with its familiar appearance. Cursor resembles Microsoft's code editor, Visual Studio Code, which is used by approximately three out of four developers worldwide. Related: 'Building It Ourselves': Morgan Stanley Created an AI Tool to Fix the Most Annoying Part of Coding. Here's How It Works. With the $900 million it has raised, Anysphere wants to keep improving Cursor and bringing value to its customers. "We want to be the ones pushing the frontier," Truell told Bloomberg.