Anysphere Inc., a startup with a popular code editor powered by artificial intelligence, has raised $100 million in fresh funding.

TechCrunch reported the investment on Thursday, citing people familiar with the matter. Anysphere is now reportedly worth $2.4 billion, up from $400 million four months ago. The new cash infusion was led by Thrive Capital with participation from Andreessen Horowitz, which also backed the company’s previous raise.

One likely reason for the sharp increase in Cursor’s valuation is its rapid sales growth. According to TechCrunch’s sources, Anysphere saw its annualized recurring revenue grow more than tenfold between April and October to $48 million. The company says that its software is used by engineers at OpenAI, Stripe Inc., Samsung Electronics Co. Ltd. and other major tech firms.

Anysphere’s code editor, Cursor, is based on the popular VS Code software development tool from Microsoft Corp. The startup augmented the core feature set with an AI assistant that helps programmers carry out their work faster. Additionally, it doubles as a search tool for jumping to specific sections of a code file. 

The assistant is accessible through a ChatGPT-like chatbot interface. According to Anysphere, developers can ask the AI for help with a programming task and have it generate upwards of a dozen lines of code at once. If the initial output doesn’t fully meet project requirements, users can ask the chatbot to modify it.

When developers create a new application component, they have to ensure it will be compatible with the application’s existing code. Cursor automatically identifies which existing code it needs to take into account based on the file currently open in the editor window and the location of the user’s cursor. Optionally, developers can specify additional code snippets that the AI should consider.

Cursor draws on technical information from other sources as well. According to Anysphere, developers can upload a screenshot of an application’s interface and ask the AI to replicate it. Additionally, Cursor can search the web for explainers and other resources relevant to a software project. 

The software also promises to optimize developers’ workflow in more subtle ways. It automatically fixes typos, which means engineers can write code without having to regularly scan it for simple errors. Additionally, Cursor predicts where users will wish to place their cursor next, which streamlines the process of navigating code files.

The code editor’s automation features are powered by large language models from OpenAI and other AI providers. According to Anysphere, Cursor uses a mix of general-purpose frontier LLMs and algorithms optimized specifically for coding tasks.

This week’s funding round comes about a month after the company bought Supermaven, the developer of a popular AI coding tool. The new capital could enable Anysphere to make more acquisitions. It should also put the company in a better position to address competition from rival coding assistant providers. 

One such competitor, Poolside Inc., recently raised $500 million to build LLMs optimized for programming tasks. The company has commissioned a server cluster with 10,000 graphics cards to support its development efforts. In August, fellow coding assistant provider Magic AI Inc. raised $320 million from former Google LLC Chief Executive Officer Eric Schmidt and other prominent investors.

Image: Cursor