The startup behind Viral AI Coding App Cursor is snapping top talents from AI Enterprise Startups to boost competition with Microsoft’s Github Copilot and attract businesses looking to charge their employees with AI coding tools.
In a recent case, cursor maker Anysphere has signed a deal to acquire AI-powered customer relationship management (CRM) startup Koala.
As part of the contract, Cursor will attract some of the top Koala engineers to build a dedicated enterprise readiness team. However, the entire Koala team will not be joining Anysphere and Cursor will not be integrating Startup’s Core CRM products, a source told TechCrunch.
Koala is scheduled to close in September, the company said in a blog post published Friday. The announcement comes just five months after Koala raised a $15 million Series A led by CRV, with participation from Hubspot Ventures, Recall Capital and Afore. The koala was almost four years old. According to LinkedIn, there were about 30 employees. I worked with clients such as Vercel, Statsig, and Retool.
The sources of this story requested anonymity to speak to TechCrunch about private issues. Koala and its founders did not respond to TechCrunch’s request for comment. The cursor declined to comment.
Koala Deal will draw pictures of two types of AI startups that will be seen in 2025. The AI Tool Juggernaut is the AI Tool Juggernaut, which is beginning to infiltrate the biggest players in the AI space, including Microsoft and Enthropic. At the same time, there are more startups like Koala: B2B AI startups, along with co-founders of Meta and advisors like Jack Altman – quickly no longer steam.
Cursors take advantage of this gap, leveraging intermediate AI startups as a way to build their own enterprise offerings. According to the information, Anysphere has recently hired Cybersecurity Resources CEO Travis McPeak to lead the company’s security team.
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These deals are very similar to Big Tech’s reverse acquirers, such as recent deals employing Meta scale AI leaders. Similar to Meta and Scale’s transactions, the cursor can now move quickly to build new business segments while leaving suspicious businesses behind.
Cursor hopes that the talents of Koala and Resourcely will help engineers evolve from personal developer tools that will become a company-wide platform that will be used quietly in the workplace and pay large contracts for businesses to access. Most companies today that provide AI tools to their employees choose Microsoft’s Github Copilot. It serves as an AI-powered extension to existing integrated development environments (IDEs) such as VS Code and Jet Brain.
Cursors, an IDE with independent AI, often have to beat GitHub Copilot to attack transactions, which is often done in head-to-head testing. Still, Microsoft has a corporate advantage thanks to its long-standing relationship with legacy companies and its large relationships with sales, security and support teams.
Last year, Cursors decisively built it to include dozens of employees. Several Cursor employees are currently visiting the offices of Fortune 500 companies and are showing how to integrate cursor AI tools into their business, according to those familiar with the issue.
The enterprise push on the cursor appears to gain traction. Anysphere said it reached $500 million in ARR in June and is currently working with more than half of the Fortune 500, including Nvidia, Uber and Adobe. Sources familiar with the issue say revenue is growing, and the majority of that growth comes from corporate transactions.
However, the cursor also needs to dodge the growing threat field as it competes with Microsoft.
The most pressing thing is humanity, an important partner of Anysphere, whose Claude Code products have grown rapidly in recent months. Cursors rely heavily on human AI models to enhance their own coding products. (As one of our biggest customers, cursors are also essential to humanity.)
At the same time, Google scooped up the leadership team of Windsurf, the key contender of the cursor, in an AI-powered IDE space. Cognition, the maker of AI coding agent Devin, could acquire the remaining team at Windsurf and provide a big lift for both businesses.
It is worth noting that these are all different types of AI tools, but employers tend to see their products as well. As an AI tool that improves productivity for software engineers. These employers may have the right idea. After all, Anthropic, Microsoft, Cursor, and Cognition are all developing AI coding agents that are intended to fully automate workflows. This can converge the AI coding space.
Why do everyone compete with everyone else to build AI coding products? The coding tool has become one of the first AI products to find a “product market fit.” This is an elusive goal to cheer up the ears of venture capitalists. AI coding products are used daily by millions of software engineers and are beginning to generate real revenue.
However, this race doesn’t just build the best AI coding tools. It’s about who can expand their enterprise operations as quickly as possible while the market is still holding onto them. With Microsoft, Google, Anthropic and others all moving fast, the cursor acquisition strategy could determine whether it will join the ranks or become another startup that can’t scale fast enough.
