Sources: Cursor in talks to raise $2B+ at $50B valuation as enterprise growth surges

AI coding startup Cursor is nearing new funding that could help the four-year-old company raise at least $2 billion in new capital, according to four sources familiar with the matter. Returning investors Thrive and Andreessen Horowitz are expected to lead the financing at a $50 billion valuation ahead of the new capital infusion, the people said.

Battery Ventures, a new investor, could also participate in the financing, according to two sources. Strategic investor Nvidia is also expected to write a check, one person said.

Although the round is already oversubscribed, the deal terms are not yet final and could still change.

If the financing is completed, it would nearly double Cursor’s previous post-money valuation of $29.3 billion, which was assigned to the company in its last fundraising six months ago.

Despite stiff competition from other AI coding offerings, such as Anthropic’s Claude Code and OpenAI’s revamped Codex, Cursor’s revenues continue to grow rapidly.

Cursor predicts it will end 2026 with annualized sales of more than $6 billion, two people said. This trajectory means that the company expects to at least triple its annualized revenue over the next ten months. In February, Cursor reached $2 billion in annualized revenue, calculated by projecting its most recent monthly revenue over a year. Bloomberg reports this.

Like many AI coding startups that rely on third-party models, Cursor operated at negative gross margins until recently, that is it cost more to make the product work than the startup could charge for it. The introduction of a proprietary Composer model last November, along with the ability to rely on cheaper models such as China’s Kimi, helped the company achieve a slight gross margin gain, the people said.

At a more granular level, the company has achieved positive gross margins on its sales to large enterprises, but continues to lose money on individual developer accounts, according to one person.

By reducing its dependence on third-party suppliers, Cursor is trying to avoid being replaced by its own suppliers, particularly Anthropic, whose Claude Code has emerged as the startup’s main rival.

Cursor and Battery Ventures declined comment. Thrive, a16z and Nvidia did not respond to a request for comment.

Formerly known as Anysphere, Cursor was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT.