Cursor in talks to raise at a $10B valuation as AI coding sector booms

Investor interest in AI coding assistants is exploding.

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.

The round, if it transpires, would come about three months after Anysphere completed its previous fundraise of $100 million at a pre-money valuation of $2.5 billion, as TechCrunch was first to report. The new round is expected to be led by returning investor Thrive Capital.

Thrive Capital and Anysphere didn’t immediately respond to a request for comment.

While Anysphere’s previous round valued the company at 25 times its $100 million ARR (per The New York Times), investors seem to be willing to value fast-growing companies at even higher multiples now. Anysphere’s current annualized recurring revenue (ARR) may have already climbed to $150 million, The Information reported, which means the new deal, should it happen would be a whopping 66 times ARR.

Anysphere isn’t the only company receiving such a high valuation from investors.

Codeium, a company behind AI coding editor Windsurf, is raising capital at a valuation of nearly $3 billion, TechCrunch reported last month. Kleiner Perkins, which is leading the round into Codeium, valued the company at about 70 times ARR of about $40 million.

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AI is adapting fastest in coding tools, outpacing its use in sales, law, healthcare, and other sectors, according to investors.

In recent weeks, investors have been approaching Poolside, another AI-powered coding company that is also developing its own LLM, sources tell TechCrunch and The Information. Poolside didn’t immediately respond to a request for comment.