Anysphere, a two-year-old business that developed Cursor, an AI-powered coding helper, has acquired more than $60 million in Series A funding at a post-money valuation of $400 million, according to two persons familiar with the matter.
Andreessen Horowitz and Thrive Capital co-led the round. Patrick Collison, Stripe's co-founder and CEO, also participated in the round.
Anysphere, a16z, and Collison did not respond to our request for comment. Thrive declined to comment.
Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger co-founded the company while attending MIT. Truell and Sanger later took part in Neo Scholars, a prominent mentoring program for undergraduate students majoring in technological subjects. Neo, which also operates an accelerator and a venture fund, oversaw Anysphere's pre-seed investment. Last year, the business raised $11 million in seed funding headed by OpenAI Startup Fund, with participation from former GitHub CEO Nat Friedman, Dropbox co-founder Arash Ferdowsi, and other angel investors.
Anysphere is part of a growing number of AI coding copilot startups. Cognition, Poolside, Magic, and Augment are some of the other firms aiming to improve software authoring efficiency.
Investor interest in this area is not surprising. During Microsoft's earnings call last month, CEO Satya Nadella stated that GitHub Copilot, an AI-powered tool that helps developers write code faster and more efficiently, "is already larger than all of GitHub was when it was acquired," in terms of revenue. According to reports, GitHub's revenue could have been as high as $300 million when the tech giant agreed to buy the software development site for $7.5 billion in 2018.
That means that about 3 million engineers worldwide are paying Microsoft $100 per year (the annual cost of GitHub's individual subscription) to become more productive coders, according to a VC with an investment holding in one of the coding businesses. "If you have that mountain of demand, you get a pretty competitive landscape," said the economist.
According to one source, Anysphere's revenue and usage have both been rapidly increasing.
Business Insider reported in July that Anysphere was raising a new round of funding with a target valuation of $400 million.