Anysphere, the company behind the AI-powered coding assistant called Cursor, has successfully raised $100 million in a Series B funding round. This investment values the company at $2.6 billion after the money has been added. Thrive Capital, a previous investor, is leading this funding round.
This new investment comes just four months after Anysphere raised $60 million in a Series A funding round, which valued the company at $400 million. In that earlier round, Thrive Capital and another well-known venture capital firm, Andreessen Horowitz (often called a16z), were involved. While a16z participated in this latest funding round, they did not lead it this time.
Neither Thrive Capital nor a16z has commented on this latest funding round, and we haven’t received any responses to our requests for more information.
Recently, TechCrunch reported that many investors, including Index Ventures and Benchmark, were eager to invest in Anysphere. However, it seems that Anysphere is growing so quickly that existing investors decided to invest even more money, despite the company’s valuation skyrocketing from $400 million to $2.6 billion in just a few months. This rapid growth and the competition among investors to support Anysphere have caught the attention of many people in Silicon Valley, and it was even highlighted by a social media account called Arfur Rock.
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The market for AI-powered coding assistants is quite competitive, with various options available such as Augment, Codeium, Magic, and Poolside. This area has become a profitable space for AI technology. However, none of these alternatives have gained as much popularity among developers as Cursor. They are all competing against Microsoft’s GitHub Copilot, which recently raised the stakes by launching a free version of its service.
Despite the competition, Anysphere has seen impressive growth in its revenue. The company’s annual revenue was $4 million in April, but by October, it had increased to $4 million per month. This means that Anysphere’s annual recurring revenue (ARR) in October was $48 million. When considering this revenue, the latest funding round valued Anysphere at over 50 times its revenue. However, the actual valuation might be slightly lower if the company’s revenue growth continued at that rapid pace.
Cursor operates on a freemium model, meaning it offers a free trial for new users. After a two-week trial period, users can choose to pay for a subscription. The pricing options include a $20 monthly fee for a professional plan or a $40 monthly fee for a business plan, which is designed for larger teams and organizations. Notable companies that use Cursor include OpenAI, Midjourney, Perplexity, Replicate, Shopify, and Instacart.
Anysphere was co-founded in 2022 by four students from MIT: Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger. The company went through OpenAI’s accelerator program last year and received its initial funding from the OpenAI Startup Fund. Other notable investors in Anysphere include the venture capital firm Neo, Patrick Collison (co-founder of Stripe), Nat Friedman (former CEO of GitHub), and Arash Ferdowsi (co-founder of Dropbox).
