Cursor AI the Coding Platform is the AI Startup of the Hour
Hey Everyone,
The AI startup Anysphere, better known for their AI coding tool Cursor, has got a series A funding round amid a lot of praise.
Cofounded in 2022 by four friends who met at MIT, Cursor announced on Thursday that it has raised $60 million in a Series A funding round led by Andreessen Horowitz with participation from Thrive Capital, OpenAI Startup Fund and Google Chief Scientist Jeff Dean.
"Something beautiful is happening to code.... It can be difficult to discern amidst a flurry of demos, headlines, and waitlists, but AI is changing coding, and it's changing it today. Little by little, the molasses that characterizes building and changing software is being replaced by lightness and control." - Cursor Team
TechCrunch already reported this two weeks ago but somehow they gave it another PR push. The reason is also it's an AI coding tool that is trending on Twitter by some fairly young talent.
Some software engineers are using Cursor and Claude in tandem instead of Github Copilot, that is owned by Microsoft. Frontier models + coding tools + software talent and experience seems to be increasing productivity of coding related projects.
You might notice too that a16z is fairly good at PR with their comms and media team. Last year, the company raised an $11 million seed round led by OpenAI Startup Fund with participation from former GitHub CEO Nat Friedman, Dropbox co-founder Arash Ferdowsi and other angel investors. So this series A of $60 million is fairly promising, even with such a young team they have made a lot of progress in a relatively short time.
Cursor has become recognized as an increasingly popular way to code with AI, powered by an ensemble of custom and frontier models, user-friendly code editing, and petabyte-scale infrastructure.
In terms of AI coding startup it's getting interesting with Magic, Augment, Poolside - Anysphere is part of an increasingly crowded field of AI coding copilot startups.
The seduction of these startups isn't just for coders but for no-coders, builders and the idea that anyone can code or learn to code in the Generative AI era. The funding, led by Andreessen Horowitz, includes notable contributions from Jeff Dean, John Schulman, Noam Brown, and the founders of Stripe and GitHub, among others.
Cursor in just a brief period has over 30,000 customers, across some of the world's largest enterprises, storied research labs, and innovative startups, including the likes of OpenAI and Midjourney.
With the new investment, the startup is now valued at $400 million, and the company has more than $10 million in annual recurring revenue. Cursor operates on a subscription model where users pay $20 or $40 per month for access to its AI tools. The company plans to build tools that can automate complex tasks and improve developer productivity significantly. The fun part about the startups in this category is they are also claiming they are on the cusp of Agentic AI, where LLMs make Enterprise tasks a lot easier and incredibly, allowing nearly anyone to become an entrepreneur or build a product from scratch.
The value-creation of no-code by the 2030s with this sort of technology might not just enable high productivity among engineers but new kinds of startups and more builders in society lowering the bar, cost and ability to scale for new kinds of innovation.
So there's something more exciting than usual about Cursor as a product, because also the leaders of Stripe, Github, Ramp, Perplexity, and OpenAI, have backed it and it's a bit symbolic of the future of code and how engineers are increasingly using hybrid Generative AI coding tools in their work.
In 2024 we now live in a world where models like Claude 3.5 Sonnet, v0.dev or frontend.ai produce usable results in mere seconds. Cursor is becoming an important component in the AI tool box of coders. Cognition Labs, Codeium, there are so many great names in this space. Since the majority of a developer’s time is spent maintaining, debugging, or tweaking code the tools that are best for those tasks, save the developers the most time.
According to a16z's write up:
Cursor is a fork of VS Code that’s heavily customized for AI-assisted programming. It works with all the latest LLMs and supports the full VS Code plugin ecosystem. What makes Cursor special are the features designed to integrate AI into developer workflows — including next action prediction, natural language edits, chatting with your codebase, and a bunch of new ones to come.
