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AnysPhere, creator of the fast-growing programming tool cursor, has closed new funding that will more than triple its valuation to about $9 billion as money continues to flow into Silicon Valley’s hottest artificial intelligence startups.
According to those familiar with the deal, Openai Bucker Thrive Capital led the $900 million round at San Francisco-based Anysphere. Andreessen Horowitz and Accel are among the other investors who participated.
Anysphere was founded in 2022 by a quartet in his 20s who discovered studying mathematics and computer science at the Massachusetts Institute of Technology. Previously, it raised $2.5 billion in January, and $155 million from Thrive and Andreessen Horowitz.
The big jump in Anysphere’s price tag has seen a rapid increase in annual recurring revenues since the last round of funding, rising to around $200 million in April, making it one of the fastest growing software companies to date.
Nevertheless, a dramatic step-up in valuation could rekindle concerns among some investors, especially given the recent disruption in the open market.
Openai was valued at $260 billion in March after SoftBank pledged to lead a $400 billion investment round into the company.
Two groups founded by former Openai executives — Ilya Sutskever’s Safe Superintelligence and Mira Murati’s Thinking Machines Lab — are also targeting large funding rounds.
According to those familiar with the issue, SSI recently secured a $30 billion valuation, while Murati’s company was in discussions to raise $2 billion at a $1 billion valuation. Neither of them have released any products yet.
Cursor has gained millions of fans of computer programmers with its AI-powered software development toolkit, and its creators say they write about a billion lines of working code every day.
By using natural language to tell AI what to make instead of writing code by hand, it accelerates productivity for programmers, one of the most sought after skills in the tech industry.
Despite competing with tools like Microsoft’s GitHub Copilot, Cursor has customers from high-tech companies such as Stripe, Openai and Spotify. There are also well-known AI researchers such as Andrej Karpathy.
Previous Tesla and Openai engineers will create the phrase “Vibe Coding” in February, describing the almost trance-like state they are talking to Cursor’s AI, creating software that “sends completely to the atmosphere, accepts the index, and even forgets that the code exists.”
Coding assistants have become a breakout hit among generative AI startups, encouraging high-tech companies to increase productivity.
Last month, Google CEO Sundar Pichai said that “it includes people who accept AI-Suggested Solutions” of code submitted in internal software development.
Several AI coding startups have emerged since Openai launched ChatGPT in late 2022, including France’s poolside and Silicon Valley-based Windsurf.
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With the prices of foundation model companies like Openai and Mankind out of reach of everyone except the wealthiest investors, venture capitalists are increasingly focusing on AI application developers such as Anysphere, Search app confusion and video generator Synthesia as ways to enter the AI boom.
AI app startups raised $8.2 billion in 2024, according to data from dealroom.co and Flashpoint.
While many enterprise AI apps are generating tens of millions of dollars in revenue right away, some investors are concerned that this is not a durable sales, but rather a reflection of extensive AI experiments between companies.
Anysphere, Thrive Capital, Andreessen Horowitz and Accel all declined to comment.
