AI startups continue to dominate venture capital funding, with one in every three VC dollars globally in 2024 flowing into the sector. According to PitchBook, AI and machine learning startups accounted for 35.7% of total VC deal value, reaching $131.5 billion, a 50% increase from the previous year.
Continuing this AI dominance this year, US-based Anysphere, the force behind the AI-powered code editor Cursor, is in talks to raise funding that could value the company at $10 billion, reports Bloomberg. Existing investor Thrive Capital is reported to lead this round. Previously, the company closed $100 million funding late last year, which valued it at $2.5 billion.
However, Anysphere is not the only company in the AI-powered coding segment to raise such massive funding and valuation. Codeium, which is behind Windsurf coding editor, is also said to be raising investment valuing it at around $3 billion.
Anysphere’s meteoric ascent
Founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger, Anysphere has quickly positioned itself as a leader in AI-assisted coding solutions. Its flagship product, Cursor, leverages advanced AI to assist programmers in real-time, streamlining the coding process and enhancing productivity. The platform’s intuitive interface and robust functionalities have garnered significant attention within the developer community.
Cursor: Revolutionising coding with AI
Cursor stands out in the market by offering features that cater to both novice and experienced developers. Its AI capabilities provide code suggestions, error detection, and optimisation recommendations, thereby reducing the time and effort required in the coding process. This tool has become indispensable for many developers seeking efficiency and accuracy in their work.
European counterparts that raised funding
Here are some European AI coding companies that also raised funding in recent times.
Poolside AI: Specialising in AI-driven coding solutions, Poolside AI achieved unicorn status in 2024. The company focuses on enhancing developer productivity through advanced AI tools, positioning itself as a significant player in the European AI coding landscape. After raising $500 million Series B funding, the company is now valued at nearly $3 billion.
Codesphere: Codesphere, based in Karlsruhe, Germany, offers a platform that enables developers to program and scale complex applications directly in the cloud. By eliminating the gap between development and operations, Codesphere transforms deployment into a developer-centric self-service experience, reducing time-to-market and costs. Last year, the German startup raised $18 million in funding.
Lovable: Founded by Swedish entrepreneurs, Lovable has rapidly emerged as a prominent player in the AI coding industry. The platform enables users to create production-ready software without traditional coding, allowing individuals to describe their ideas in natural language and see them transformed into fully functional applications. This approach democratises software development, making it accessible to a broader audience. In February 2025, Lovable secured €14.3 million in a pre-Series A funding round.
What’s next?
With a valuation target approaching $10 billion, Anysphere is well-positioned to scale globally. The company is likely to push further into international markets, especially in regions with a burgeoning tech ecosystem. By refining its AI models and incorporating emerging technologies, the company can stay ahead of market trends and address new challenges in software.
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