What makes Cursor different is integrated AI into developer workflows — including next action prediction, natural language edits, chatting with your codebase among newer awaited features
By Ada Jain
Anysphere, the developer of AI-powered coding assistant Cursor, is in talks with venture capitalists to raise capital at a valuation of nearly $10 billion, Bloomberg reported.
In January, the AI code editor raised $105 million in Series B funding, valuing the company at $2.5 billion, with backing from Thrive Capital and 16z – Andressen Horowitz. Other investors included venture firm Neo, Stripe co-founder Patrick Collison, former GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi.
Earlier on in 2023, Cursor raised $8 million from OpenAI and $11 million in total funding. In 2024, Anysphere raised $60 million in a Series A funding round led by Andreessen Horowitz, valuing the company at $400 million, which led to a sixfold increase in Series B.
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According to a blog post by investing giant Andreessen Horowitz, “All of the major AI models can now perform basic programming tasks reliably (with greater than 90% accuracy). They are starting to tackle more complicated real-world tasks through planning and multi-turn prompting strategies. And they can do it in more than 80 languages.However, writing code isn’t just about writing new code. The majority of a developer’s time is spent maintaining, debugging, or tweaking code.”
Cursor has been at the forefront of solving this problem as a native AI editor.
Founded in 2022 by four MIT graduates Michael Truell, Sualeg Asif, Arvid Lunnemark, and Aman Sanger, under Anysphere Inc, an applied research lab involved in building AI systems. Cursor reached a staggering $100 million Annual Recurring Revenue (ARR) in just 21 months—making it the fastest-growing SaaS company ever.
What makes Cursor different is integrated AI into developer workflows — including next action prediction, natural language edits, chatting with your codebase among newer awaited features.
Built on top of Microsoft’s Visual Studio Code, Cursor differentiated itself by integrating cutting-edge AI models, delivering an intuitive developer experience, and continuously expanding its features.
Unlike traditional SaaS platforms, Cursor focused on individual developers, rapidly amassing a loyal base of over 360,000 users, including AI pioneers like former OpenAI researcher Andrej Karpathy as well as Midjourney, Shopify and Instacart among others. Anysphere has also quietly rolled out so-called agentic features for Cursor that can independently complete some tasks for users.
In November 2024, Cursor acquired SuperMaven, a fast, context-aware copilot for code completion. SuperMaven’s creator, Jacob Jackson, spurred the modern wave of AI coding tools by inventing Tabnine in 2019 and through pioneering work at OpenAI. “This is roughly the same as Supermaven’s previous plan: the team had shifted focus to an editor, because extension APIs were blocking the next useful things that they wanted to build,” Truell wrote in his post. “Why join forces? We have a lot to do, and it seems like we can build a more useful product, faster, together.”
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The market for AI coding tools is a large and growing one, with Polaris Research projecting that it’ll be worth $27.17 billion by 2032. AI deals accounted for more than 35% of the $366 billion worth of venture capital deals last year, according to PitchBook. There’s no shortage of AI-powered coding assistance startups — see Augment, Codeium, Magic, and Poolside. Among larger players include Microsoft’s GitHub Copilot, Vercel’s v0, and the emerging Windsurf platform — all vying for the AI coding throne.