Cursor in talks to raise $2 billion at $50 billion valuation

AI coding startup Cursor, which was previously known as Anysphere, is in talks to raise at least $2 billion in fresh capital, according to four sources familiar with the matter. The financing round is expected to value the company at $50 billion, nearly doubling its previous $29.3 billion post-money valuation from its last fundraise six months ago. Although the round is already oversubscribed, the deal terms are not final and may still change, according to a source.

The expected investor lineup for the unfinalized round includes:

• Thrive and Andreessen Horowitz, which are expected to lead the financing, according to people familiar with the matter.
• Battery Ventures, which may participate in the round, according to two sources.
• Nvidia, which is expected to write a check, according to one person.

The startup’s valuation is supported by rapid revenue growth. In February, Cursor reached $2 billion in annualized revenue run rate—which is a projection of annual revenue based on recent monthly performance—as reported by Bloomberg. The company expects to at least triple its annualized revenue over the next 10 months, according to a source. Additionally, two people said Cursor forecasts ending 2026 with an annualized revenue run rate of more than $6 billion.

This growth is accompanied by a shift in the company’s unit economics. According to people familiar with the matter, Cursor has achieved slight gross margin profitability, which is profitability calculated after subtracting the cost of goods sold. Like many AI-coding startups, Cursor previously operated at negative gross margins due to the high cost of running third-party models. The introduction of its proprietary Composer model last November, along with the ability to call on less expensive external models like China’s Kimi, has helped the company achieve slight gross margin profitability. On a granular level, the company has reached positive gross margins on its sales to large enterprises, but reportedly continues to lose money on individual developer accounts, according to one person.

Cursor faces intense competition in the AI-coding market from competitors like Anthropic and OpenAI. To navigate this, the company is working to reduce its reliance on outside providers, aiming to avoid being replaced by its own suppliers.

The startup was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger.

Why it matters

The financing would nearly double Cursor’s previous $29.3 billion valuation, reflecting the company’s rapid revenue growth and shift toward gross margin profitability. This valuation surge underscores the high investor demand for AI-coding tools, even as the startup faces intense competition from its own foundational model suppliers.