Cursor at $65M ARR
Jan-Erik Asplund
TL;DR: Sacra estimates that AI-native IDE Cursor grew 6,400% YoY from $1M in 2023 to $65M ARR as of November 2024. Now the #2 AI coding tool by revenue—after GitHub Copilot at $400M ARR—Cursor is up against both Microsoft’s distribution advantage and two competing visions for the role of AI in software development. For more, check out our full report and dataset on Cursor.
Key points via Sacra AI:
- In 2021, using OpenAI’s new GPT-3 model, GitHub Copilot launched as an code editor plugin that autocompletes short blocks of code—creating the opportunity for Cursor (A16Z, $71M raised) in 2023 to build an AI-native integrated development environment (IDE) indexed on large language models' (LLMs) specific capability for writing code. Launched out of the AI research lab Anysphere (backed by OpenAI’s Startup Fund) and founded by 4 MIT grads (2021-22) to build AI tools that can 10x developer productivity, Cursor uses state-of-the-art models from Anthropic and OpenAI for core reasoning and code generation while training their own specialized proprietary models for low-latency-required tasks like edit prediction and applying code changes.
- Sacra estimates that Cursor hit $65M in annualized recurring revenue (ARR) in November 2024, growing 6,400% YoY, with the company valued at $400M at its Series A backed by A16Z and Thrive Capital and with a potential Series B coming together at $1.5B-$2.5B coming out to a 20x-40x forward revenue multiple. Compare to GitHub Copilot at ~$400M in ARR, growing 281% YoY, powered by GitHub’s distribution into 100M+ global developers—by far the most widely adopted AI developer tool so far, Copilot was responsible for 40% of net new GitHub revenue in 2024.
- Two distinct visions have emerged for the role of AI in software engineering—GitHub Copilot, Cursor, and Codeium (General Catalyst, $243M raised) augment engineers with AI in the IDE, while Devin (Founders Fund, $175M raised) and Replit Agent (A16Z, $272M raised) replace them with AI co-workers. Finally, for non-technical users, Vercel’s v0 (Accel, $563M raised) and Bolt.new ($4M ARR) allow non-technical users to describe and deploy full applications through natural language commands.
For more, check out this other research from our platform:
- Cursor (dataset)
- Anthropic (dataset)
- OpenAI (dataset)
- Scale (dataset)
- Edo Liberty, founder and CEO of Pinecone, on the companies indexed on OpenAI
- Will Bryk, CEO of Exa, on building search for AI agents
- AI talking heads growing 1024%
- Kyle Corbitt, CEO of OpenPipe, on the future of fine-tuning LLMs
- How AI is transforming productivity apps
- AI and the future of video
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