Cursor in talks for $2 billion+ in additional funding at $50 billion valuation amid corporate growth

AI coding startup Cursor is preparing to raise at least $2 billion in new funding. The round is likely to be led by Thrive and Andreessen Horowitz (a16z), with a pre-money valuation being discussed at $50 billion.

New investors may include Battery Ventures, and strategic investor Nvidia is also reported to be putting in money. The round is already oversubscribed, but terms have not yet been finalized, so changes remain possible.

If the deal goes through, Cursor's valuation will nearly double from the $29.3 billion post-money valuation of its round six months ago. Competition has intensified, but Cursor's revenue is growing rapidly even amid competition from Anthropic's Claude Code and OpenAI's Codex.

According to the company's projections, Cursor could reach an annual run rate of over $6 billion by the end of 2026. This would mean growing its annual run rate by at least 3x within 10 months, and Bloomberg reported that Cursor reached a $2 billion run rate back in February.

On the profitability front, there has been a recent shift. The company once had a negative gross margin due to its reliance on external models, but after introducing its own Composer model last November and using the cheaper Kimi model, it reportedly achieved slight gross margin profitability.

In detail, revenue from large enterprise customers shows a positive gross margin, but individual developer accounts are still losing money. The strategy of reducing dependence on external providers can be read as an attempt to reduce the risk of being replaced by its supplier, Anthropic.