Cursor, an AI coding assistant, announced it has acquired Graphite, a startup that uses AI to review and debug code.
Terms of the deal were not disclosed, but Axios reported that Cursor paid “well above” Graphite’s final valuation of $290 million. This valuation was set when the five-year-old company raised $52 million in Series B funding earlier this year.
This partnership makes strategic sense. The code output generated by AI is buggy, requiring engineers to spend a lot of time fixing it. While Cursor offers AI-powered code reviews through its Bugbot product, Graphite’s specialized toolset provides a unique feature called “Stack Pull Requests,” which allows developers to work on multiple dependent changes simultaneously without waiting for approval.
The combination of AI-powered code creation and AI-powered code review tools speeds up the process from drafting code to shipping.
Other startups offering AI-powered code reviews include CodeRabbit, which was valued at $550 million in September, and smaller competitor Greptile, which announced a $25 million Series A this fall.
Cursor co-founder and CEO Michael Truell first met Graphite co-founders Merrill Lutsky, Greg Foster, and Tomas Reimers before launching the company as Neo Scholar, a prestigious program for college students run by Ali Partovi’s early-stage venture Neo. Neo backed Graphite at the seed stage, according to PitchBook data.
Additionally, Cursor and Graphite have common investors including Accel and Andreessen Horowitz.
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Cursor was valued at $29 billion last November and is pursuing acquisitions. Last month, the company acquired technology recruitment strategy firm Growth by Design. In July, Cursor poached talent from AI-powered CRM startup Koala at a post-money valuation of $129 million, according to PitchBook.
