Cursor Triples Its Value to $29.3 Billion

Bloomberg

Watch Cursor Triples Its Value to $29.3 Billion - Bloomberg on Dailymotion

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00:00Let's get the rounds out of the way because there is an awful lot to discuss about what

00:04Kurser is doing and how Kurser has been being used. But my goodness, you've raised quite a lot

00:10of money quite quickly from the last time you raised money at a much higher valuation.

00:14Why and what does it mean to you? Well, first, thank you for having me.

00:19We raised this money to invest deeply in research. And we are this company that's something in

00:25between a product company and then also an AI and models company. And in parts, it's an important

00:31product lever for us to do our own investment in product-specific models. And that's something

00:36we've been doing for many years. This lets us do that in a bigger way.

00:39It's AI coding. And, you know, I was in Washington, D.C. for GTCDC. Jensen Wang goes on stage and he

00:46made a very pointed remark that software, generally speaking, is now worth paying for.

00:52And he used Kurser as the case study. Would you actually talk us through the case study?

00:57NVIDIA is a big company. It has many of its own engineers. How are they using Kurser? What

01:02are they using it for? And how are you charging them for it?

01:06Well, we've been really happy to see not just the accelerating demand in our market,

01:10but also the success in our deployments with customers. There was actually a study that came

01:15out recently that showed that customers, after they switch to our agent, get 40% more done.

01:20And this is a productivity reference for the engineer themselves, the workload that they're

01:25trying to get through. Yes. Okay. It's looking at pull requests merged and metrics like that.

01:30But folks are seeing lots of success out in the field. And so to Jensen's comment,

01:34the ROI of buying the tool is just has been so high for many of our customers, which makes us

01:40really happy. And on the pricing front, there's two components. One is a seat component where we look

01:45at usage. We look at how many people are using Kurser every month within an account. And then

01:49pricing matches that. And then if folks are using the product in a really, really deep way,

01:54there's also a usage component similar to a Databricks or a snowflake.

01:58What's interesting is vibe coding was all the lexicon in the past few months. And many people felt

02:04that it was individuals who paying the $20 for Kurser and really doing it and really feeling the power

02:09of understanding and being able to prompt. How about now what you call AI coding? Is this more

02:16of an enterprise play? Is it more of a sit at home and play it being a developer play?

02:21We serve professional development teams. And in particular, professional engineers are our ICP.

02:28And so when we use the term AI coding, it's to underline that we care. You know, there are some

02:34folks that experiment with the tool for prototypes. But the core use case, the reason the vast majority

02:39of customers are using Kurser is to get real work done in their real jobs. And that means shipping

02:44carefully in professional code bases at the highest degree of quality.

02:48We were just talking about all the CEOs of the Magnificent Seven and others who have been using

02:54Kurser, been talking about Kurser. They must have been calling Kurser. Michael, how many inbounds

02:59are you getting on companies wanting to buy you at this moment?

03:02We've been really excited to see demand both across the Magnificent Seven. Six out of seven of the

03:11Magnificent Seven actually are customers. And we're really happy about that. But then also staples of the

03:15real economy like Starbucks and PwC and Hilton and Budweiser. And then many digital natives like

03:21Stripe, Adobe, Uber, NVIDIA, Shopify, and others like that.

03:26I'm going to jump in there, Ed, just quickly.

03:28Go for it, please.

03:29You're not answering exactly my question. Has anyone been trying to buy you?

03:35I can't talk about things like that here.

03:37You can talk about them here. Bloomberg Tech is the right place for it. What you've been doing is

03:42shopping yourself. I find that very interesting. You used M&A to address your own talent requirements,

03:49growth by design. What was behind that move? And what was the problem you were trying to solve for

03:56in doing that?

03:58Growth by design was a talent agency that we had worked with for a long time. And the folks that

04:04were running that business, we got to know over many months, working with them on building the team.

04:09They're respected recruiting leaders in the industry. And we started talking with them a few months ago

04:14about whether they would come in-house and join us to lead talent for us. And this is a strategy that

04:20we've taken kind of across the board, whether it be in R&D, go-to-market, G&A. We look for the best

04:26people in our industry. And sometimes, conveniently or inconveniently, they're running their own

04:30companies.

04:31What's so interesting is how fierce the talent fight has been in many ways, Michael. Talk to us about where

04:38you are getting your talent from, how you're going to see that growth by design is going to bring on

04:43even more of the best people to work and build your business.

04:47Still largely, folks that join us, we reach out to. And that's through knowing past colleagues of

04:54theirs. And we invite them to interview. But more and more, we're scaling that and trying to

05:01diversify how we find folks. And then we have a deep interview process where, for instance, on the

05:08engineering side of things, we invite folks in for two whole days to spend two days with us going

05:12on a project. And that's both giving them lots of information on us as a company. It also gives us

05:18really great signal about whether they're going to be a fit when they join.

05:22You've grown incredibly quickly. And you've joined us in this program to explain how Cursor is being used in

05:28the real world and generating real revenues. But if you were to reflect honestly on what's still

05:33difficult for you and Cursor and what some of the, I guess, barriers or headwinds are to your

05:39industry or you specifically, what are they? You know, what is it that you need to see change right

05:44now? Well, we have a long product journey left. We are just at the very start of how we think

05:49building software and coding is going to change over the course of the next few years. And I think it can

05:55be really, really easy for folks who are removed from writing code all day to stay in touch with

06:00just how far away we are from all of software changing. And despite all of the change over the

06:05past few years, there's still so much further to go. And so in particular, we're very focused on making

06:10Cursor not just more productive for individual engineers, but now helping teams broadly and helping

06:15across the software development lifecycle. Those that we regard as leaders of industry have talked

06:22about the AI displacement of jobs or not displacement of jobs. And actually, as it relates

06:27to Cursor, you know, many take the view that it's not AI that's going to take your job. It's somebody

06:33that uses AI that's likely to take your job. Just through the lens of what Cursor sees through

06:39its customers and internally, where do you sit on that debate, Michael? Definitely in the data that we

06:44have. We don't see that. We see the fold of who's participating in the software development lifecycle

06:50expanding. And that's more engineers getting within the fold and growing seats within engineering

06:58accounts and growing engineering teams. But that's also folks in support or in design helping to do small

07:03changes within a production code base, too.

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