Anysphere, a startup creating an AI code editor called Cursor, is raising a new funding round with at least a valuation of $400 million from A16z, Business Insider has learned.
The latest round's valuation is a large increase from the last raise.
Founded in 2022, Anysphere last raised $8 million in seed funding at a valuation of $56.5 million, according to PitchBook data. The July 2023 deal was led by OpenAI Startup Fund, with participation from BoxGroup, former GitHub CEO Nat Friedman, and Dropbox cofounder Arash Ferdowsi.
The company has raised $11 million in total, but it is unclear how much Anysphere raised in the 2024 round. Details of this latest round are not yet finalized, and the figures involved are subject to change. Anysphere declined to comment. A16z did not respond to request for comment.
The startup's co-founder Michael Truell partnered with MIT classmates Sualeh Asif, Arvid Lunnemark, and Aman Sanger to build Anysphere, according to TechCrunch. Anysphere's website notes it is an "applied research lab building extraordinarily productive human-AI systems." Cursor, an AI-first code editor, is Anysphere's first product.
Cursor aims to boost engineers' efficiency. The product is an AI-powered integrated development environment that autocompletes code, writes code from plain English, and answers questions about the codebase.
Cursor generates revenue with a freemium model and charges up to $40 per user a month for premium features, according to its website. Engineers from companies like Midjourney, Perplexity, Shopify, and OpenAI already use Cursor.
Anysphere is one of many in the AI pair programming category. Widely used for code completion, GitHub CoPilot has expanded to include features like Copilot Chat, which allows engineers to chat in natural language, and CoPilot Workspace, a Copilot-native development environment.
Replit AI, an AI-powered development platform, raised over $227 million, and Sourcegraph, a code intelligence startup, raised over $223 million in funding, according to PitchBook data. Other coding assistant startups include CodiumAI, Continue, and Tabnine.
