Anysphere, a two-year-old startup that’s developed an AI-powered coding assistant called Cursor, has raised over $60 million in a Series A financing at a $400 million post-money valuation, two sources familiar with the deal told TechCrunch.

The round was co-led by Andreessen Horowitz and Thrive Capital. Patrick Collison, co-founder and CEO of Stripe, also participated in the round.

Anysphere, a16z and Collison didn’t respond to a request for comment. Thrive declined comment.

The company was co-founded by Michael Truell, Sualeh Asif, Arvid Lunnemark and Aman Sanger while they were students at MIT. Truell and Sanger later participated in Neo Scholars, a prestigious mentorship program for undergraduate students majoring in technical fields. Neo, which also runs an accelerator and a venture fund, led Anysphere’s pre-seed investment. Last year, the company raised an $11 million seed round led by OpenAI Startup Fund with participation from former GitHub CEO Nat Friedman, Dropbox co-founder Arash Ferdowsi and other angel investors.

Anysphere is part of an increasingly crowded field of AI coding copilot startups. Other startups that aim to make software writing more efficient include Cognition, Poolside, Magic, and Augment, among others.

Investors’ interest in this area is not a surprise. During its earnings call last month, Microsoft CEO Satya Nadella said that GitHub Copilot, an AI-powered tool that helps developers write code faster and more efficiently, “is already larger than all of GitHub was when it was acquired,” referring to its revenue. Reports estimate that GitHub’s revenue was as high as $300 million when the tech giant agreed to buy the software development platform for $7.5 billion in 2018.

That means about 3 million developers worldwide are paying Microsoft $100 a year (the annual cost of GitHub’s individual subscription) to be more productive coders, estimated a VC with an investment stake in one of the coding startups. “If you have that mountain of demand, you get a pretty competitive landscape,” he said.

Anysphere’s revenue and usage has also been growing fast, one person said.

In July, Business Insider reported that Anysphere was in the process of raising a new round and aiming for a $400 million valuation.

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This article originally appeared on TechCrunch at https://techcrunch.com/2024/08/09/anysphere-a-github-copilot-rival-has-raised-60m-series-a-at-400m-valuation-from-a16z-thrive-sources-say/