AI coding startup Cursor is close to raising new funding, with the four-year-old company on track to raise at least $2 billion in new capital, according to four people familiar with the matter. Returning investors Thrive and Andreessen Horowitz are expected to lead the financing at a valuation of $50 billion ahead of the new capital injection, the people said.
New investor Battery Ventures may also participate in the financing, two people familiar with the matter said. Strategic investor Nvidia also plans to write a check, one of the people said.
Although this round is already full, the terms of the deal are not final and are subject to change.
Once completed, this financing will almost double the post-finance valuation of $29.3 billion allocated to Curser in its previous financing six months ago.
Despite stiff competition from other AI coding products, including Anthropic’s Claude Code and OpenAI’s improved Codex, Cursor’s revenue continues to grow rapidly.
Annual sales are expected to exceed $6 billion by 2026, according to two people familiar with the matter. This trajectory suggests the company expects annual revenue to at least triple over the next 10 months. In February, Cursor reached $2 billion in annual sales, calculated by projecting monthly sales for the most recent year, Bloomberg reported.
Like many AI coding startups that rely on third-party models, Cursor Until recently, the gross profit margin was negative. Running the product cost more than the startup could charge. The introduction of its own Composer model last November, as well as the availability of cheaper models such as China’s Kimi, helped the company achieve modest gross profit margins, people said.
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On a more granular level, the company is achieving positive gross margins for large enterprises, but continues to lose money for individual developer accounts, one of the people said.
Cursor is trying to avoid being replaced by its own suppliers, particularly Anthropic, by reducing its dependence on external providers. Anthropic’s Claude Code has emerged as the startup’s main rival.
Cursor and Battery Ventures declined to comment. Thrive, a16z and Nvidia did not respond to requests for comment.
Cursor, formerly known as Anysphere, was co-founded in 2022 by MIT students Michael Truell, Sueleh Asif, Arvid Lunnemark, and Aman Sanger.
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