AI coding assistant maker Anysphere has raised $105 million in a funding round led by Thrive Capital, marking a sixfold increase in its valuation to $2.5 billion since its last funding round in May. The investment underscores growing interest in AI-powered development tools and highlights Cursor's increasing adoption among software developers.
Key Points
- Anysphere's valuation jumped to $2.5B, up from its previous round just 8 months ago
- The company reports $100M in annual recurring revenue, with its Cursor tool seeing widespread adoption
- Thrive Capital, Andreessen Horowitz, and Benchmark participated in the round
Anysphere's latest funding round comes amid surging investor interest in AI startups, with AI deals accounting for over 35% of venture capital investments last year, according to PitchBook.
The company's flagship product, Cursor, leverages both proprietary models and large language models from OpenAI and Anthropic to assist programmers with code completion. CEO Michael Truell said the company turned down higher offers, suggesting strong investor confidence in the company's trajectory.
Cursor's newest feature can predict a user's next line of code, with capabilities extending to generating up to 10 minutes worth of programming. The company has also quietly introduced autonomous coding features that can independently complete certain tasks.
The competitive landscape includes established players like GitHub's Copilot and startups such as Codeium and Poolside. Anysphere recently acquired competitor Supermaven in November, consolidating its position in the market.
Mile Grimshaw, partner at Thrive Capital, noted widespread adoption of Cursor among developers across their portfolio companies. "We've never seen a company achieve such broad and rapid adoption," added Martin Casado, partner at Andreessen Horowitz and Anysphere board member.
The company maintains a focus on cost efficiency, particularly in computing resources. Its current valuation represents approximately 25 times its annual recurring revenue, aligning with industry standards for AI startups.
Despite concerns about potential overvaluation in the AI sector, Grimshaw draws parallels between companies like Anysphere and transformative tech giants like Google and Amazon, emphasizing the significant market opportunity in AI-powered development tools.
Looking ahead, the funding will help Anysphere demonstrate financial stability as it continues to develop its AI coding assistant capabilities and expand its market presence in the rapidly evolving landscape of software development tools.