Cursor, an AI coding startup founded by four MIT graduates, raises $2.3B at a $29.3B valuation

Cursor’s rise in the AI coding space has been one of the most unusual stories of the year. A product that started as a side project by four MIT graduates in their mid-20s has turned into a company pulling in more than $1 billion in annualized revenue, earning praise from tech CEOs, and now securing one of the largest private funding rounds of 2025.

The company’s latest raise is nothing short of staggering. Anysphere, the San Francisco parent company behind AI startup Cursor, has raised $2.3 billion in Series D funding co-led by Accel and Coatue, with Andreessen Horowitz, Thrive Capital, Nvidia, and Google joining the round. The deal pushes Cursor’s valuation to $29.3 billion, more than ten times where it stood earlier this year.

Cursor shared the raise in a post on X, saying: “We’ve raised $2.3B in Series D funding from Accel, Andreessen Horowitz, Coatue, Thrive, Nvidia, and Google. We’re also happy to share that Cursor has grown to over $1B in annualized revenue and now produces more code than any other agent in the world. This funding will allow us to invest deeply in research and build Cursor’s next magical moment.”

Founded in 2022, Cursor built its momentum by integrating AI directly into code editors and making the editing experience feel as natural as writing in a text document. The tool writes, edits, and reviews code, and it adapts to each developer’s style. The company’s early traction came from engineers who discovered it long before investors did. That grassroots momentum later reached executives at companies like Nvidia and Stripe, whose leaders publicly praised the product.

The Wall Street Journal first reported the funding round on Thursday, writing: “Cursor, a startup that makes an AI coding tool beloved by engineers, has raised $2.3 billion at a $29.3 billion valuation—nearly 12 times the value the company had in January.” The report noted that Accel and Coatue led the new round, while Thrive Capital, DST Global, and other existing investors returned.

AI Coding Startup Cursor Hits $29.3B Valuation After Massive $2.3B Raise From Google and Nvidia

New investors include Google and Nvidia. Google provides AI services and cloud infrastructure to the company, and Nvidia is one of Cursor’s enterprise customers. Nvidia CEO Jensen Huang has regularly spoken about Cursor in recent public appearances, crediting the startup for pushing the limits of AI-assisted coding.

Cursor has reportedly turned away acquisition offers from major AI labs, according to people familiar with the discussions. The company is choosing to push forward independently while building its in-house AI model, Composer, even as competition intensifies with GitHub Copilot, OpenAI’s new coding tools, and Anthropic’s latest offerings.

Much of Cursor’s early edge came from its usability and its ability to switch between AI models from OpenAI, Anthropic, Google, and others. But that flexibility comes with a cost: the company pays significant fees to the big AI model providers. For Cursor to maintain its lead, owning more of its tech stack has become a priority.

Behind the scenes, Cursor’s founders have developed a reputation for unconventional recruiting. In an interview on the a16z podcast, CEO Michael Truell described how the team pursued key hires long after they had declined job offers. Truell said the team once “flew across the world to the person after they said no” and even arranged a staged dinner with researchers to bring a candidate back into the conversation. “They end up being one of the best people on the team,” he said.

Truell said the company used “crazy recruiting stunts” to build its first ten hires and still applies the same approach today. That includes acquiring entire companies when standout talent is already working elsewhere. One example is Cursor’s purchase of Supermaven, an AI coding assistant founded by former OpenAI researcher Jacob Jackson. Cursor announced the deal last year, writing in a blog post that “we can build a more useful product, faster, together.” The acquisition price was not disclosed.

Anysphere, Cursor’s parent company, now employs about 150 people. The company earlier raised $900 million at a $9.9 billion valuation in June, counting Stripe, Instacart, and Shopify among its customers.

This funding round lands in the middle of a fierce hiring wave across the AI sector. Meta drew attention earlier this year after offering $100 million signing bonuses to lure top talent. OpenAI CEO Sam Altman called the bonuses “crazy” on a podcast, suggesting that such incentives might hurt a company’s culture. Perplexity CEO Aravind Srinivas compared today’s talent race to the NBA, saying individual engineers now hold extraordinary leverage.

Cursor, meanwhile, has leaned into the competition rather than pulled back. Truell has described the company’s approach as doing “anything possible to get the most talented people.” So far, the strategy seems to be paying off. Cursor’s valuation has surged at a pace few companies ever see, and its early users say the tool is reshaping how they work.

With fresh capital, a high-profile cap table, and a product used heavily inside some of the largest tech companies, Cursor is pushing to widen its lead — while the rest of the AI industry tries to catch up.

Cursor Founders