The startup behind the viral AI coding app Cursor is snapping up prime expertise from AI enterprise startups in a bid to bolster its competitors with Microsoft’s GitHub Copilot and win over companies trying to supercharge their workers with AI coding instruments.
In a single latest case, Cursor maker Anysphere struck a deal to accumulate the AI-powered buyer relationship administration (CRM) startup Koala, two sources conversant in the matter advised TechCrunch.
As a part of the deal, Cursor will deliver on a number of of Koala’s prime engineers to construct out a devoted enterprise-readiness group. Nevertheless, the whole Koala group is not going to be becoming a member of Anysphere, and Cursor doesn’t plan to combine the startup’s core CRM product, a supply advised TechCrunch.
Koala plans to close down in September, the corporate mentioned in a weblog submit revealed on Friday. The announcement comes simply 5 months after Koala raised a $15 million Sequence A led by CRV, with participation from HubSpot Ventures, Recall Capital and Afore. Koala was almost 4 years outdated, had roughly 30 workers in keeping with LinkedIn, and had labored with shoppers reminiscent of Vercel, Statsig, and Retool.
Sources on this story requested anonymity to talk with TechCrunch about non-public issues. Koala and its founders didn’t reply to TechCrunch’s request for remark. Cursor declined to remark.
The Koala deal paints an image of the 2 varieties of AI startups we’re seeing in 2025. There’s Cursor, a juggernaut of an AI instrument that’s rising so quick it’s beginning to encroach on the AI house’s largest gamers, together with Microsoft and Anthropic. On the identical time, there’s a rising variety of startups like Koala: B2B AI startups that appeared promising — with a co-founder from Meta and advisors like Jack Altman — however have rapidly run out of steam.
Cursor is capitalizing on this disparity, leveraging middling AI startups as a method to construct out its personal enterprise choices. Anysphere additionally just lately employed the CEO of cybersecurity startup Resourcely, Travis McPeak, to guide the corporate’s safety groups, in keeping with The Info.
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These offers look loads like Large Tech’s reverse-acquihires, reminiscent of Meta’s latest deal to rent Scale AI’s leaders. Very similar to in Meta and Scale’s deal, Cursor can now transfer rapidly to construct out new enterprise segments whereas leaving questionable companies behind.
Cursor hopes that Koala and Resourcely’s expertise will assist it evolve from a private developer instrument that engineers quietly use at work and change into an enterprise‑broad platform that corporations pay giant contracts to entry. Most enterprises at this time that supply workers an AI instrument select Microsoft’s GitHub Copilot, which works as an AI-powered extension to present built-in growth environments (IDEs) reminiscent of VS Code or JetBrains.
Cursor, which is a standalone AI-powered IDE, must beat out GitHub Copilot to strike offers in lots of instances, and it typically does in head-to-head exams. Nonetheless, Microsoft has the higher hand within the enterprise because of its long-standing relationships with legacy corporations, in addition to its giant gross sales, safety, and assist groups.
Within the final 12 months, Cursor has decisively constructed out its go-to-market and gross sales group — which now comprises dozens of workers. A number of Cursor workers now spend their days visiting the workplaces of Fortune 500 corporations and exhibiting them how they’ll combine Cursor’s AI instruments into their enterprise, in keeping with an individual conversant in the matter.
Cursor’s enterprise push appears to be gaining traction. Anysphere mentioned it reached $500 million in ARR in June, and now works with greater than half of the Fortune 500, together with NVIDIA, Uber, and Adobe. A supply conversant in the matter says that income has since grown, and an more and more giant share of that progress comes from enterprise offers.
However as Cursor competes with Microsoft, it additionally must fend off a rising area of threats.
Probably the most urgent one is Anthropic, an important companion to Anysphere whose Claude Code product has grown quickly in latest months. Cursor depends closely on Anthropic’s AI fashions to energy its personal coding merchandise. (As one among its largest clients, Cursor can also be very important to Anthropic.)
On the identical time, Google simply scooped up the management group of Windsurf, a significant competitor to Cursor within the AI-powered IDE house. Cognition, the maker of the AI coding agent Devin, acquired the remainder of Windsurf’s group, probably providing a big raise to each companies.
It’s value noting that every one of those are various kinds of AI instruments, however employers are likely to view the merchandise equally: as AI instruments that may enhance the productiveness of software program engineers. These employers may need the correct thought. In any case, Anthropic, Microsoft, Cursor, and Cognition are all creating AI coding brokers which purpose to automate workflows utterly, which can be the place the AI coding house converges.
You would possibly ask, why is everybody competing with everybody else to construct AI coding merchandise? Coding instruments have change into one of many first AI merchandise to search out “product market match” — the elusive aim that makes the ears of enterprise capitalists perk up. AI coding merchandise are getting used each day by thousands and thousands of software program engineers, and so they have began to generate actual income.
Put one other method, the race isn’t nearly constructing one of the best AI coding instrument anymore. It’s about who can scale their enterprise operations the quickest whereas the market continues to be up for grabs. With the likes of Microsoft, Google, and Anthropic all shifting quick, Cursor’s acquisition technique might decide whether or not it joins their ranks or turns into one other startup that couldn’t scale quick sufficient.
