AI coding startup Cursor is nearing new funding in which the four-year-old company would raise at least $2 billion in fresh 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, prior to the new capital injection, the people said.
Battery Ventures, a new investor, may 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 final and may still change.
The financing, if completed, would nearly double Cursor’s previous $29.3 billion post-money valuation, achieved six months ago.
Despite fierce competition from other AI-coding offerings, such as Anthropic’s Claude Code and OpenAI’s revamped Codex, Cursor’s revenue continues to climb rapidly.
Cursor forecasts ending 2026 with an annualized revenue run rate of more than $6 billion, two people said. This trajectory implies the company expects to at least triple its annualized revenue over the next 10 months. In February, Cursor reached $2 billion in annualized revenue, calculated by projecting its most recent monthly sales over a year, Bloomberg reported.
Like many AI-coding startups reliant on third-party models, Cursor operated at negative gross margins until recently, meaning it cost more to run the product than the startup could charge for it. The introduction of a proprietary Composer model last November, along with the ability to call on less expensive models like China’s Kimi, has helped the company achieve slight gross margin profitability, the people said.
Techcrunch event
San Francisco, CA
|
October 13-15, 2026
Specifically, the company has reached positive gross margins on its sales to large enterprises, but continues to lose money on individual developer accounts, according to one person.
By relying less on outside providers, Cursor is trying to avoid being replaced by its own suppliers, most notably Anthropic, whose Claude Code has emerged as the startup’s main rival.
Cursor and Battery Ventures declined comment. Thrive, a16z, and Nvidia didn’t respond to request for comment.
Cursor, previously known as Anysphere, was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT.
