AI coding startup Cursor is close to securing new funding in which the four-year-old company would raise at least $2 billion in new capital, according to four sources familiar with the matter. Incumbent investors Thrive and Andreessen Horowitz are expected to lead the financing at a valuation of $50 billion, ahead of the new capital infusion, the sources 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 terms of the deal are not final and may still change.
The funding, if completed, would nearly double Cursor’s previous amount. Post-currency valuation of $29.3 billionawarded to the company during 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 revenue continues to climb rapidly.
Cursor expects to end 2026 with annualized revenue of more than $6 billion, two people said. This trajectory implies that 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 dependent on third-party models, Cursor leveraged has negative gross margins until recently, that is it costs more to run the product than the startup could charge. The introduction of a proprietary system Composer model last November, as well as the ability to tap into cheaper models like China’s Kimi, helped the company achieve a slight gross margin, the sources said.
Techcrunch event
San Francisco, California | October 13-15, 2026
On 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 relying less on external service providers, Cursor is trying to avoid being replaced by its own suppliers, notably Anthropic, of which Claude Code has established itself as the startup’s main rival.
Cursor and Battery Ventures declined to comment. Thrive, a16z and Nvidia did not respond to request for comment.
Cursor, formerly known as Anysphere, was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark and Aman Sanger while they were students at MIT.
Marina Temkin is a venture capital and startups reporter at TechCrunch. Before joining TechCrunch, she wrote about venture capital for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned her CFA designation.
You can contact or check Marina’s outreach by sending an email marina.temkin@techcrunch.com or via encrypted message at +1 347-683-3909 on Signal.
