Software engineering became a subscription race in 2026, and the money moved faster than the tools did1. Few SaaS categories on record have moved faster. Anysphere makes the Cursor editor. It crossed $100 million in annual revenue in January 2025. Revenue cleared $500 million by June. A November Series D took it past $1 billion, and it surpassed $3 billion early this year. Cognition AI answered by buying a rival outright and courting financing near $40 billion by August2. Michael Truell, Anton Osika, and Amjad Masad now compete for engineering budgets that once belonged quietly to GitHub.
Anysphere's annual revenue climbed from $100 million in January 2025 to past $3 billion by early 2026
Cursor maker Anysphere's annual revenue at four reported milestones, billions of dollars
Each dot is one reported revenue milestone, in time order from left to right, so each rise in the line is Cursor's revenue growing between milestones.
Source: Wikipedia [1]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Period | Value | Note |
|---|---|---|
| Jan. 2025 | $0.1B | Crossed $100 million |
| June 2025 | $0.5B | Cleared $500 million |
| Nov. 2025 | $1B | Past $1 billion around the Series D |
| Early 2026 | $3B | Surpassed $3 billion |
Cursor's Compounding Curve
Truell built Anysphere with three MIT classmates in 20221. They were Sualeh Asif, Arvid Lunnemark, and Aman Sanger. Funding tracked revenue almost exactly. A $900 million Series C led by Thrive Capital landed June 5, 2025. The price: $9.9 billion post-money. Five months later, Accel and Coatue led a $2.3 billion Series D at $29.3 billion. Google and Nvidia joined that round. Annual revenue crossed $1 billion around the same time. Investors priced against numbers already banked.
Cursor's maker tripled its valuation in five months, from $9.9 billion to $29.3 billion
Anysphere's valuation after each of its two 2025 funding rounds, billions of dollars
Each column is the price one funding round set on Anysphere: the gray column is the June Series C, and the magenta column is the Series D five months later.
Source: Wikipedia [1]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Item | Value | Note |
|---|---|---|
| June 2025 Series C | $9.9B | $900 million led by Thrive Capital |
| Nov. 2025 Series D | $29.3B | $2.3 billion led by Accel and Coatue, with Google and Nvidia |
Growth that fast strains a small team. Anysphere spent 2025 buying skill as well as capital1. July brought an acqui-hire of Koala's engineers. Travis McPeak, formerly Resourcely's chief executive, joined as security lead. December added Graphite, a code-review startup. Lunnemark left in October 2025 to found Integrous Research. Even a company growing this fast loses cofounders to their own next ideas.
Cognition Buys Its Way to Scale
Wu, Steven Hao, and Walden Yan founded Cognition in August 2023, betting that a fully autonomous engineer would beat a smarter autocomplete2. Devin, an autonomous software engineer, sat against Cursor's helper model. The price climbed from $350 million in March 2024 to $2 billion that April. It reached $4 billion by March 2025 and $10 billion that September. A doubling to $26 billion followed by May 2026. Financing talks neared $40 billion in August. Few startups anywhere have packed a hundred-fold price rise into thirty months.
Cognition's biggest 2025 move was a purchase, rather than a product2. A deal to buy Windsurf, an agentic IDE, closed in July 20259. The combined product relaunched under the Devin Desktop name in June 2026. Recruiting followed an unusual pattern. Cognition chased contest programmers. Olympiad gold medalists Gennady Korotkevich and Andrew He joined. Headcount reached roughly 200 by 2026. The bet on olympiad champions carries a thesis. Raw reasoning, more than product polish, decides which agent writes correct code under pressure.
Lovable and Replit Chase the Long Tail
Osika took a different route in, aiming past professional engineers at anyone who could describe an application in a sentence3. He built GPT Engineer as an open-source tool in 2023 with cofounder Fabian Hedin. The paid product became Lovable in December 2024. A $200 million Series A led by Accel priced it at $1.8 billion in February 2025. By November, Lovable reported $200 million in annual revenue. A $330 million Series B led by CapitalG and Menlo Ventures pushed the price to $6.6 billion that December. Khosla Ventures, Salesforce Ventures, and Databricks Ventures joined.
Lovable's pitch aims at builders outside engineering roles3. People build whole apps from plain prompts. That market runs wider than Cursor's, even where revenue per user runs lower.
Masad's Replit took a parallel route after a hard stretch4. An earlier round of layoffs came first. The company partnered with Microsoft's Azure in July 2025. ARR topped $100 million by January 2026, per a 36Kr account. Build-an-app tools compete less directly with engineer tools. Both draw from the same capital pool, eager to fund anything labeled an AI coding agent.
The Incumbents Answer
Incumbents moved too, with quieter numbers attached. Anthropic's Claude Code posted a reported 5.5x revenue rise by July 20255. The builders on the other side of that growth reported their own results. Michael Truell measured it inside Cursor. “We're seeing state-of-the-art coding performance from Claude Sonnet 4.5, with significant improvements on longer horizon tasks.”8 Scott Wu gave numbers for Devin. “For Devin, Claude Sonnet 4.5 increased planning performance by 18% and end-to-end eval scores by 12%—the biggest jump we've seen since the release of Claude Sonnet 3.6.” Read what both men measure. Longer tasks and planning, rather than raw answer quality, which is the axis a subscription renews on. Claude-powered coding tools grew software-subscription share 4.9% month over month by February 2026. A rival's share slipped in the same stretch. OpenAI shipped Codex CLI in April 2025 and Codex web the following month6. GPT-5-Codex reached API developers by late September. OpenAI's own account describes Codex reviewing the vast majority of internal pull requests. Cisco Meraki, Duolingo, Ramp, Vanta, Virgin Atlantic, and Gap show up as adopters.
GitHub answered from a different angle: pricing7. Copilot moved to usage-based billing on April 27, 2026, which put Microsoft's oldest AI product on the same meter its youngest rivals had used from the start. Changes weeks earlier had added flex allotments and a new Max tier. A consumption model mirrors how the upstart agents already charge. Microsoft decided flat pricing undersells the product. Copilot now does more work per session than its autocomplete design ever required.
Talent Decides the Race
Every deal and hire above traces to a resource scarcer than money. Engineers who can build agents good enough to justify the prices are the constraint. Cognition's chase for olympiad medalists, Anysphere's Koala acqui-hire and McPeak hire, and Truell's own cofounder exit all point one way12. A handful of proven builders set a company's direction by staying or leaving. Coding agents sell straight to the people best placed to judge whether they work. That rewards engineering credibility over marketing spend.
Anushree Verma, a senior director analyst at Gartner, studied agentic AI deployments across more than 3,400 organizations and published her findings in July 202510. “Most agentic AI projects right now are early stage experiments or proof of concepts that are mostly driven by hype and are often misapplied,” Verma said. Her title grades the whole category Cursor and Cognition sell into. Truell and Wu, by contrast, graded one company's demo each.
By the numbers
- Anysphere's annualized revenue reached $3 billion by early 2026, up from $100 million in January 20251.
- Cursor-maker Anysphere carried a $29.3 billion valuation after its Nov. 13, 2025 Series D1.
- Cognition sought a valuation topping $40 billion in financing talks reported by August 2026, up from $10 billion a year earlier2.
- Lovable's reported annual recurring revenue hit $200 million by November 20253.
- Replit's ARR crossed the $100 million mark around January 2026, per public reporting4.
- A 5.5-times revenue increase is what Anthropic's Claude Code reportedly posted by July 20255.
What to watch
Cognition's push past a $40 billion valuation deserves scrutiny against actual revenue disclosures once the round closes, given how far ahead of confirmed ARR figures that number sits relative to Cursor's more transparent trajectory. Watch Replit's next funding update for confirmation of any valuation attached to its reported $100 million ARR, since public reporting on the figure has proven inconsistent. GitHub's usage-based Copilot pricing offers a natural experiment worth tracking through 2026: whether enterprise customers accept consumption billing or migrate toward flat-fee competitors will signal which pricing model wins the category longer term. Cognition's Olympiad-heavy hiring pattern, if it keeps paying off in product quality, may push rival labs toward similar competitive-programming recruiting pipelines.
Sources
- Wikipedia contributors, "Cursor (code editor)," Wikipedia, retrieved Sept. 4, 2026, https://en.wikipedia.org/wiki/Cursor_(code_editor)
- Wikipedia contributors, "Cognition AI," Wikipedia, retrieved Sept. 4, 2026, https://en.wikipedia.org/wiki/Cognition_AI
- Wikipedia contributors, "Lovable (company)," Wikipedia, retrieved Sept. 4, 2026, https://en.wikipedia.org/wiki/Lovable_(company)
- Wikipedia contributors, "Replit," Wikipedia, retrieved Sept. 4, 2026, https://en.wikipedia.org/wiki/Replit
- Wikipedia contributors, "Claude Code," Wikipedia, retrieved Sept. 4, 2026, https://en.wikipedia.org/wiki/Claude_Code
- OpenAI, "Introducing Upgrades to Codex," OpenAI, Sept. 15, 2025, https://openai.com/index/introducing-upgrades-to-codex/
- GitHub Staff, "GitHub Copilot Is Moving to Usage-Based Billing," The GitHub Blog, April 27, 2026, https://github.blog/news-insights/company-news/
- Anthropic, "Claude Sonnet 4.5," Anthropic, Sept. 29, 2025, https://www.anthropic.com/news/claude-sonnet-4-5
- Maxwell Zeff, "Cognition, maker of the AI coding agent Devin, acquires Windsurf," TechCrunch, July 14, 2025, https://techcrunch.com/2025/07/14/cognition-maker-of-the-ai-coding-agent-devin-acquires-windsurf/
- Liezel Once, "Gartner: 40% of agentic AI projects face cancellation," Outsource Accelerator, July 2, 2025, https://news.outsourceaccelerator.com/gartner-agentic-ai-cancellation/