Cursor continues acquisition spree with Graphite deal

AI coding assistant Cursor has announced that it has acquired Graphite, a startup that uses AI to review and debug code.

While terms of the deal were not disclosed, Axios reported that Cursor paid “much more” than Graphite’s last valuation of $290 million, which was set when the five-year-old company raised a $52 million Series B earlier this year.

The connection makes strategic sense. The output of AI-generated code often contains errors, requiring engineers to spend a lot of time on corrections. Even though Cursor offers code review via AI Bugbot product, Graphite’s specialized toolset offers a separate capability called a “stacked pull request.” which allows developers to work on multiple dependent changes simultaneously without waiting for approval.

By combining AI-powered code writing with AI-powered code review tools, you accelerate the process from drafting code to shipping it.

Other startups offering AI-powered code reviews include CodeRabbit, which was valued at $550 million in September, and a smaller competitor, Greptile, which announced a new initiative. $25 million Series A this fall.

Michael Truell, co-founder and CEO of Cursor, first met Graphite co-founders Merrill Lutsky, Greg Foster and Tomas Reimers before launching the company as Neo Scholar, a prestigious program for students run by Neo, Ali Partovi’s start-up company. Neo backed Graphite in its seed stages, according to PitchBook data.

Additionally, both Cursor and Graphite have other investors in common, including Accel and Andreessen Horowitz.

Cursor, which was last valued at $29 billion in November, has been making acquisitions. It was purchased last month Growth by designa technology recruitment strategy company. In July, Cursor picked up the talent of AI-powered CRM startup Koala for a post-money valuation of $129 million, according to PitchBook.