Cursor Creator Anysphere Hits $9 Billion Valuation with $900 Million Raise

San Francisco-based Anysphere, the creator of the AI-powered code editor Cursor, has raised $900 million in a funding round led by Thrive Capital, with Andreessen Horowitz and Accel also participating. That’s according to a report by the Financial Times. This latest investment has significantly increased Anysphere’s valuation to around $9 billion, up from its $2.5 billion valuation in January 2025.

The company has already secured $105 million previously with some of the above-mentioned investors.

Founded in 2022 by four MIT graduates, the company quickly became popular among developers. Their main product, Cursor, is an AI-powered integrated development environment (IDE). This tool helps programmers by using natural language commands to generate code, offering autocompletion features, and providing intelligent rewrites. Cursor is based on Visual Studio Code and seamlessly integrates advanced AI capabilities into the coding process. This allows developers to write, debug, and improve their code more effectively. 

Major technology companies like Stripe, OpenAI, and Spotify have adopted Cursor, which reportedly generates almost a billion lines of code every day.

From the start, developers took notice. Cursor quietly spread through engineering teams at major tech companies like Stripe, Spotify, and OpenAI, where speed is everything. The tool reportedly helps generate close to a billion lines of code per day, and for many users, it didn’t just augment productivity—it replaced older tools like GitHub Copilot altogether.

The product-market fit was undeniable. That, combined with Anysphere’s early backing by OpenAI’s Startup Fund in an $8 million seed round in 2024, gave it an edge few developer startups ever attain.

But rapid scale also brought growing pains. Earlier this year, Anysphere faced backlash after its AI support bot, Sam, mistakenly informed users that Cursor subscriptions could only be used on one device, resulting in forced logouts and confusion. Co-founder Michael Truell quickly addressed the issue, citing it as a case of AI hallucination, and pledged to make AI-generated responses more transparent while fixing underlying session issues.

Still, Anysphere’s cultural ascent was sealed when Andrej Karpathy, a key influencer in the AI world, introduced the phrase “vibe coding” to describe the new experience of writing code with AI. In a viral post on X, he spotlighted Cursor as emblematic of this shift, where coding becomes less mechanical and more fluid, like thinking aloud in code. The term resonated across engineering circles and gave Cursor a near-mythic aura in developer communities.

Now, with $900 million more in the bank and a $9 billion valuation, Anysphere is among the most valuable AI developer startups in the world. But the expectations are equally high. As AI coding tools race toward commoditisation, Anysphere’s real challenge will be to maintain its technical edge and its emotional appeal.

But Cursor isn’t alone in the AI coding race. It’s going head-to-head with GitHub Copilot, Codeium’s Windsurf which recently announced deep integration into Microsoft’s development stack and an enterprise-grade Copilot Workspace.

According to a recent Business Insider article, VC investment in US generative AI coding tools has significantly increased, more than doubling from over $420 million in 2023 to surpass $780 million in 2024 alone. As Menlo Ventures partner Tim Tully shared that “I’m really high on AI coding assistants.”