Cognition raises $2B at $48B valuation as AI coding market stays wide open
Cognition, the startup behind the AI coding assistant Devin, has raised $2 billion at a $48 billion valuation. The round signals that investors believe several major players can still capture meaningful share in the AI coding market.
AI coding startup Cognition has raised $2 billion in new funding, giving it a valuation of $48 billion. The round was led by Andreessen Horowitz, Accel, Founders Fund, General Catalyst and Avenir. The investment comes just four months after Cognition's previous fundraising round, which valued the company at $26 billion.
The sharp valuation jump suggests venture capitalists still see room for multiple companies to build significant positions in AI coding, one of the most important application areas of the technology. Cognition said its annualized run-rate revenue has grown from $492 million to $900 million since May, when it announced its last raise. The company did not specify how it calculates the metric, but it is commonly defined as one month's revenue multiplied by 12.
Rival Cursor, another widely used coding assistant, was in talks in April to raise capital at a valuation of around $50 billion before agreeing to be acquired by SpaceX for $60 billion later that month. At the time of those funding talks, Cursor's annualized revenue had surpassed $2 billion. This means Cognition currently commands a higher revenue multiple than Cursor did in the spring. According to investors familiar with Cursor's financial situation, the startup sold to SpaceX largely because it was severely compute-constrained.
It remains unclear whether Cognition will encounter similar capacity shortages. The company leases an Nvidia server cluster that costs hundreds of millions of dollars a year, which could push its total cash burn to $800 million this year, The Information reported. Like Cursor before joining SpaceX, Cognition is training its own model based on open-source alternatives. Over time, this should reduce its reliance on expensive third-party models from OpenAI and Anthropic and help move the company closer to breakeven.
According to The Information, Cognition is expected to reach $4 billion to $5 billion in annualized revenue by the end of 2026. By comparison, TechCrunch reported in the spring that Cursor was on track to surpass $6 billion by year-end.
Cognition was founded in 2024 by math prodigy Scott Wu and counts Mercedes-Benz, NASA, Goldman Sachs and Citi among its major enterprise customers. Notably, a16z, which backed Cursor and profited heavily from its sale to SpaceX, is now leading a round in a Cursor competitor.
