Confirming recent rumors, code editor startup Anysphere Inc. today announced that it has closed a $900 million funding round.

OpenAI backer Thrive Capital led the raise. It was joined by several other institutional investors including Andreessen Horowitz, Accel and DST Global. Bloomberg reported that Anysphere is now worth $9.9 billion, nearly four times what it was worth after its previous funding round in December.

The valuation increase reflects the company’s rapid sales growth. Anysphere has reportedly reached $500 million in annualized recurring revenue three years after launching. According to Bloomberg, the company’s investors estimate that this milestone makes it the fastest-growing software startup of all time.

Anysphere offers a popular code editor called Cursor that uses artificial intelligence to automate programming tasks. An embedded chatbot allows developers to generate code, ask for technical explainers and perform related tasks. The software processes user requests using more than a half dozen large language models.

Many of Cursor’s features are designed to reduce the number of interruptions that developers experience while writing code.

Cursor is based on VS Code, one of the most popular open-source code editors on the market. As a result, developers can bring over keybindings from their existing VS Code environments. Keybindings are user-defined keyboard shortcuts that speed up tasks such as jumping to the start of a code file. Cursor also works with VS Code extensions.

Many programming tasks require developers to change the configuration of their workstations or download new software. Those tasks are performed using terminal commands, short code snippets inputted into a computer’s operating system. Using Cursor, developers can describe the task they wish to perform in natural language and have an AI model generate the corresponding terminal command.

The code editor also functions as a kind of spell checker. It can automatically spot and correct mistyped characters, which removes the need for developers to interrupt their workflow in order to perform troubleshooting.

Mistyped characters render the code file that contains them unusable, which makes them fairly easy to detect. Developers spot the issue as soon as they attempt to run the file. According to Anysphere, Cursor can also spot more subtle bugs that don’t render a code snippet unusable but lead to unexpected behavior or slow performance.

The company makes money by selling paid versions of its software. A Pro plan provides access to higher usage limits for $20 per month. There’s also an Enterprise tier, which offers an expanded set of user management and cybersecurity features for $40 per month.

Anysphere’s latest funding round should put it in a better position to address competition from larger market players. OpenAI recently acquired Windsurf Inc., a major Anysphere competitor, in a deal reportedly worth $3 billion. Microsoft Corp.’s competing GitHub Copilot tool, meanwhile, reportedly generates more than $500 million in annualized revenue. 

Image: Anysphere