AI coding assistant Cursor announced that it has acquired Graphite, a startup that uses AI to review and debug code.
Although the terms of the deal were not disclosed, Axios reported that Cursor paid “way over” 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 tie-up makes strategic sense. The output of code generated by AI is often buggy, forcing engineers to spend a lot of time on corrections. Even though Cursor offers AI-powered code review through its Bugbot product, Graphite’s specialized toolset provides a distinct capability called a “stacked pull request,” which enables developers to work on multiple dependent changes simultaneously without waiting for approvals.
Combining AI-powered code writing with AI-powered code review tools speeds up the process from drafting code to shipping it.
Other startups providing AI-powered code review include CodeRabbit, valued at $550 million in September, and a smaller competitor, Greptile, which announced a $25 million Series A this fall.
Michael Truell, co-founder and CEO of Cursor, first met Graphite’s co-founders, Merrill Lutsky, Greg Foster, and Tomas Reimers, before launching the company as a Neo Scholar, a prestigious program for college students run by Neo, Ali Partovi’s early-stage venture firm. Neo backed Graphite at the seed stage, according to PitchBook data.
Furthermore, both Cursor and Graphite have other investors in common, including Accel and Andreessen Horowitz.
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Cursor, which was last valued at $29 billion in November, has been on an acquisition spree. Last month, it purchased Growth by Design, a tech recruiting strategy company. In July, Cursor scooped up the talent from AI-powered CRM startup Koala for a post-money valuation of $129 million, according to PitchBook.
