My guess is they'll want to become the AI-first developer tools company and branch out into all kinds of different dev products (CI/CD, testing, etc) ala GitHub. Obviously, enterprise is where the real money is.
My napkin math is your valuation is usually 5 x raise amount and 10x annual revenue.
So valuation is 5*60m = 300m
And expected annual revenue is 30m.
At 40/month they are expecting roughly 1M monthly actives. So I am guessing their pitch is with the vc money they will get to this number and beyond before the next funding round.
Reality is more like the founders got to cash "something" for their troubles and ability to sell the dream to others. Who knows may be they will hit it out of the park before the next round.
The linked post said they got funding from Andreessen Horowitz, Thrive Capital, OpenAI, Jeff Dean, Noam Brown, and the founders of Stripe, Github, Ramp, Perplexity, and OpenAI
But there are many others like Accel and Caffeinated Capital
So the funding is usually for a "future" revenue. Ie to hit this goal. Imo if they had this revenue they'd be aiming for 10x that with a much higher valuation. VC funding is all about a growth story. If you can keep selling vision you never have to worry about revenues or hitting them. There's even a name for such schemes!
They either run out funding (so be forced to do layoffs, liquidations etc) or they have to find someone who can bail them out at unfavorable terms (read dilutions) or be really really good at story telling.
23 million SWEs today, presumably they argue that number will climb both due to growth of software in general and their tool lowering the bar of writing code.
23 million * $40 * 12 => $11B per year in rev * ~10-12x revenue enterprise value => company could grow to be worth $100B+
So assuming you feel like you're getting a fair price for it today, then there's plenty of room for your money to grow.
I don't know how many developers want to give up their bespoke IDEs. Moving away from JetBrains products (even given all there warts) would be a hard sell for me. I also don't know how many developers even pay for an IDE.
So you're assuming every single developer will pay $40 a month for Cursor??? And I say this as someone who does pay $20 a month for Cursor.
I also think it's quite the stretch to say the number of SWEs will grow meaningfully due to AI, especially when it seems like half the time you hear a pitch about how it will make software developers obsolete.
To be clear, I can easily understand how $60 million is a good investment, but I chuckle at the $100B+ valuation.
Yeah of course they’re fantasy numbers. It’s called a TAM and it’s how VCs get comfortable with putting $60 million into a company like Cursor. I made no claim as to what the company is actually worth.
And right, some people claim AI will reduce number of SWEs. If you’re Cursor, you’re probably arguing the opposite.
