Anysphere, the developer of AI-powered coding assistant Cursor, has raised a staggering $100 million in Series B funding at a post-money valuation of $2.6 billion, according to sources with knowledge of the deal. This significant investment comes just four months after the company raised its $60 million Series A at a $400 million valuation from Thrive Capital and Andreessen Horowitz.

The latest round is being led by returning investor Thrive Capital, with Andreessen Horowitz (a16z) also participating. Notably, Thrive declined to comment on the deal, and Anysphere and a16z have not responded to requests for comment. This new funding is a testament to the rapid growth and adoption of Cursor, which has become a popular tool among developers.

The interest in backing Anysphere has been intense, with investors, including Index Ventures and Benchmark, reportedly vying for a chance to participate in the round. The company's existing venture capital backers ultimately decided to double down on their investment, despite the significant leap in valuation. This development has been closely watched by industry insiders, with an X account called Arfur Rock flagging the interest in Anysphere.

The market for AI-powered coding assistants is highly competitive, with options like Augment, Codeium, Magic, and Poolside vying for attention. However, Cursor has emerged as a leader in this space, with its revenue growing exponentially. In April, the company's annualized recurring revenue (ARR) stood at $4 million, which has since surged to $4 million per month in October. This implies that Anysphere's ARR in October was a staggering $48 million, valuing the company at over 50 times its revenue.

Cursor offers a freemium model with tiered pricing, converting users to paying customers after a two-week free trial. The company's pricing strategy includes a $20 per month pro-offering and a $40 per month business subscription designed for larger teams and organizations. Notable customers of Cursor include OpenAI, Midjourney, Perplexity, Replicate, Shopify, and Instacart.

Anysphere was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT. The company went through OpenAI's accelerator last year and raised its seed funding led by OpenAI Startup Fund. Other investors in the company include venture firm Neo, Stripe co-founder Patrick Collison, former GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi.

The latest funding round is a significant milestone for Anysphere, solidifying its position as a leader in the AI-powered coding assistant market. As the company continues to grow and innovate, it will be interesting to see how it leverages this new investment to further expand its offerings and reach.