Cognition, the startup behind coding assistant Devin, announced it has raised $2 billion at a valuation of $48 billion. The round comes just four months after Cognition last raised funding at a $26 billion valuation and was led by Andreessen Horowitz, Accel, Founders Fund, General Catalyst, and Avenir.
The startup’s soaring valuation shows that VC still sees room for several large companies to capture meaningful market share in one of the technology’s most important applications: AI coding. Cognition said annual run-rate revenue has increased from $492 million to $900 million since announcing its last funding in May. The startup did not explain how it calculates its run-rate revenue, but this metric is typically defined as the monthly topline multiplied by 12.
Cursor, another popular coding assistant, was in talks to raise capital at a valuation of $50 billion in April, but later that month agreed to sell it to SpaceX for $60 billion. At the time of funding negotiations, Cursor’s annual revenue was over $2 billion. This means Cognition is currently achieving a higher revenue multiple than Cursor achieved in the spring.
Investors with knowledge of the company’s finances say Cursor’s eventual sale to SpaceX was largely due to severe computing constraints. It’s unclear whether Cognition will face a similar compute shortage.
Cognition leases Nvidia server clusters that cost hundreds of millions of dollars a year, which could lead to a total cash burn of $800 million this year, The Information reported.
Just as Cursor did before joining SpaceX, Cognition trains its own models based on open source alternative models. Over time, less reliance on OpenAI and Anthropic’s expensive third-party models will reduce costs and move the company closer to break-even.
Cognition’s annual revenue is expected to reach $4 billion to $5 billion by the end of 2026, according to The Information. By comparison, TechCrunch reported in the spring that Cursor was on track to exceed $6 billion by the end of the year. Still, it’s worth noting that a16z, a major backer of Cursor that made a fortune during its sale to SpaceX, is back in a position leading the round at Cursor’s competitor.
Founded in 2024 by math genius Scott Wu, Cognition counts Mercedes-Benz, NASA, Goldman Sachs, and Citi among its major enterprise customers.
If you make a purchase through links in our articles, we may earn a small commission. This does not affect editorial independence.
