Cursor, a rapidly expanding startup that created an AI coding tool that engineers love, has raised $2.3 billion at a valuation of $29.3 billion, which is almost 12 times its January value. Coatue, a new investor, co-led the new round alongside Accel, which had previously invested in Cursor. The company’s third funding round this year also included current backers DST Global and Thrive Capital.
In an interview, co-founder and CEO Michael Truell stated that Cursor also attracted new investors, including Google and Nvidia, whom it invited “to deepen the partnership.” Cursor receives cloud computing and AI services from Google, and Nvidia is an enterprise client that utilizes the startup’s technology. Jensen Huang, the CEO of Nvidia, has frequently praised the company in public.
Cursor, an AI startup, raises over $2 billion
Together with Sualeh Asif, Aman Sanger, and Arvid Lunnemark—all MIT grads in their mid-20s—Trull co-founded Cursor. They created an AI tool that can recognize a developer’s coding style and assist with code autocomplete, editing, and review. Software engineers claim that this feature has given the product a cult following among professionals and well-known executives, such as Patrick Collison of Stripe and Huang of Nvidia. “One of my first interactions with Michael, he talked about being low-hype and high-pragmatism,” said Miles Grimshaw, a partner at Thrive Capital. “Which is to say, they want to focus on the work and not the hoopla.”
With Cursor’s product, developers can switch between several AI models, including Google, Anthropic, and OpenAI. Although the startup pays large fees to the major AI-model providers, engineers commend the tool for its versatility and user-friendliness. When OpenAI and Anthropic released their own AI coding tools this year, the pressure from competitors increased.
In response, the business introduced Composer, its own model, towards the end of October. Although the company’s current focus is on expanding its user base, investors believe Composer may eventually lessen Cursor’s reliance on third-party models and help it retain more revenue. In order to determine whether a startup can maintain its independence while building on top of OpenAI, Anthropic, and other platforms, investors and founders are closely monitoring Cursor as AI giants continue to broaden their model offerings.
“We’re excited to be one of the first examples of a large company built on their platforms,” said Truell. He emphasized that Cursor’s relationships with AI-model providers remain mutually supportive. “All of the AI labs are important partners to us,” he said.
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