We added Cursor to the portfolio.

Anysphere was founded in 2022 by four MIT students who left before finishing. They took Visual Studio Code, the most widely used code editor in the world, and rebuilt it around AI from the ground up. GitHub Copilot, Microsoft's AI coding tool, already led the market. Cursor looked like a feature someone would copy, not a company that would last.

The revenue curve settled that question. Cursor crossed $100 million in ARR in January 2025, cleared $1 billion in November, and doubled to $2 billion by February 2026. Slack took five years to reach its first billion. Zoom took nine. Cursor did it in under three, the fastest ramp any business software company has posted.

The durability sits underneath the curve. For most of its life Cursor ran on other companies' models, routing requests to Claude and GPT and paying per token for every one. The better the product performed, the more its heaviest users cost. In late 2025 the company shipped its own coding model, Composer, to pull inference in-house, cut per-token cost, and end its dependence on third-party APIs. It approaches frontier performance on coding tasks at a fraction of the cost. Cursor stopped renting its margin from the model layer and started owning it.

The field is crowded. GitHub Copilot carries millions of paid seats behind Microsoft and OpenAI. Windsurf competes on price. Anthropic's own coding tool moved fast into developer workflows. In a market reported above $12 billion in 2026, more than double 2024, growing fast is table stakes. Keeping the margin is the moat.

The market has since agreed in the clearest way available. In June 2026 SpaceX agreed to acquire Anysphere at a $60 billion valuation and fold it into xAI. A strategic owner that already runs its own models and compute paid for the full stack, not the revenue line. That is the same insight behind bringing the model in-house, priced at scale.

Bashar Aboudaoud
Managing Member, UpRound