AI coding wizard Cursor has announced the acquisition of Graphite, a startup that uses AI to review and debug code.
Although terms of the deal were not disclosed, Axios reported that Cursor paid “significantly more” than Graphite’s last valuation of $290 million, set when the five-year-old company raised a $52 million Series B earlier this year.
This merger makes strategic sense. The output of AI-generated code is often buggy, forcing engineers to spend a lot of time on fixes. Although Cursor offers AI-driven code review through its Bugbot product, Graphite’s specialized toolset offers a separate feature called “stacked pull request.” which allows developers to work on multiple dependent changes simultaneously without waiting for approvals.
Combining AI-driven code writing with AI-driven code review tools accelerates the process from writing code to shipping it.
Other startups offering AI-based code review include CodeRabbit, valued at $550 million in September, and smaller competitor Greptile, which announced a $25 million Series A round this fall.
Cursor co-founder and CEO Michael Truell first met with Graphite co-founders Merrill Lutsky, Greg Foster and Tomas Reimers before launching the company as a Neo Scholar, a prestigious student program run by Neo, Ali Partovi’s early-stage venture capital firm. Neo backed Graphite at the seed stage, according to PitchBook data.
Additionally, Cursor and Graphite have other investors in common, including Accel and Andreessen Horowitz.
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Cursor, which was last valued at $29 billion in November, has embarked on an acquisition spree. Last month, it purchased Growth by Design, a technology recruiting strategy company. In July, Cursor signed talent from Koala, an AI-powered CRM startup, at a post-funding valuation of $129 million, according to PitchBook.
