GitHub Copilot rival Anysphere raises $60M in Series A funding at $400M valuation from a16z, Thrive, sources say

Anysphere, a two-year-old startup that developed an AI-powered coding assistant called Cursor, has raised more than $60 million in Series A funding at a post-funding valuation of $400 million, two sources familiar with the deal told TechCrunch.

The round was co-led by Andreessen Horowitz and Thrive Capital. Patrick Collison, co-founder and CEO of Stripe, also participated in the round.

Anysphere, a16z and Collison did not respond to requests for comment. Thrive declined to comment.

The company was founded by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT. Truell and Sanger later participated in Neo Scholars, a prestigious mentoring program for undergraduates majoring in technical fields. Neo, which also runs an accelerator and venture capital fund, led Anysphere’s pre-seed investment. Last year, the company raised $11 million in a seed round led by OpenAI Startup Fund with participation from former GitHub CEO Nat Friedman, Dropbox cofounder Arash Ferdowsi, and other angel investors.

Anysphere is part of an increasingly crowded field of startups tackling AI coding as pilots. Other startups aiming to make writing software more efficient include Cognition, Poolside, Magic, and Augment.

Investor interest in the space is no surprise. During last month’s earnings conference call, Microsoft CEO Satya Nadella said that GitHub Copilot, an AI-powered tool that helps developers write code faster and more efficiently, “is already bigger than GitHub itself when it was acquired,” referring to its revenue. Reports estimate that GitHub’s revenue was as much as $300 million when the tech giant agreed to buy the software platform for $7.5 billion in 2018.

That means about 30 million developers worldwide are paying Microsoft $100 a year (the annual cost of an individual GitHub subscription) to be more productive coders, according to a VC backing a coding startup. “When you have that kind of mountain of demand, you get a pretty competitive landscape,” he said.

The person added that Anysphere’s revenue and usage are also growing rapidly.

In July, Business Insider reported that Anysphere was in the process of raising a new round of funding and was aiming for a valuation of $400 million.

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