AI coding assistant Cursor's parent company has triggered a bidding war
AI coding assistant Cursor's parent company Anysphere is fielding unsolicited offers from major VC firms at valuations up to $2.5 billion, following explosive revenue growth from $4M annually to $4M monthly in less than a year.
According to multiple reports, Anysphere's explosive revenue growth—from $4 million annualized recurring revenue (ARR) in April to $4 million monthly in October—has triggered an intense bidding war among top venture capital firms, including Benchmark, Index Ventures, Andreessen Horowitz, and Thrive. It appears that Anysphere has been receiving unsolicited offers placing the startup's value at up to $2.5 billion. A person with direct knowledge of the company has confirmed that the initial offers valued the company at $1.5 billion, but this amount increased as the firms attempted to make their offer the most appealing.
The new valuation represents an over five-fold increase for the startup, which was valued at $400 million just four months ago when it raised $60 million in Series A funding led by Andreessen Horowitz and Thrive Capital. Founded in 2022 by four MIT students, Anysphere has become the most notable graduate from OpenAI’s accelerator program. After graduating from the program, the company has attracted notable investors including OpenAI's Startup Fund, former GitHub CEO Nat Friedman, and Stripe co-founder Patrick Collison.
Currently, Cursor is one of the most popular AI-powered coding assistants. These tools happen to be a hot topic not only because of the many studies and discussions surrounding questions about productivity, safety, code quality, and even copyright but also because recently, Google CEO Sundar Pichai revealed that over a quarter of Google's new code is AI-generated, and reviewed and accepted by engineers.
