The Math Behind a $10 Billion Valuation For Cursor

Now that the word is out about the maker of Cursor, an artificial intelligence-powered coding assistant, talking to investors about a new round that would value it at $10 billion, it’s important to explain why a deal may happen at that price.

The new valuation—up four times from a deal struck just three months ago—would actually be in line with other recent investments involving high-profile AI startups, as a multiple of their revenue.

That’s because the San Francisco-based Anysphere tripled its annual recurring revenue to more than $150 million in the past four months, according to a person with direct knowledge of the company’s finances. That figure implies it is generating about $12.5 million in monthly subscription revenue. (As you can see from a chart in the middle of this piece, a multiple of 66 times forward revenue isn’t crazy.)