The team behind Cursor — the viral AI-powered coding environment — is ramping up its enterprise ambitions by acquiring emerging AI talent and positioning itself as a major contender to Microsoft’s GitHub Copilot.
In a recent strategic move, Cursor’s parent company, Anysphere, finalized an acquisition deal with Koala, a startup known for its AI-driven customer relationship management (CRM) platform. Sources close to the matter told TechCrunch that this acquisition aims to enhance Cursor’s enterprise-readiness by onboarding several of Koala’s top engineers.
However, the deal isn’t a full-team transfer. Only a select group of Koala’s engineering staff will join Cursor, and the CRM product itself will not be integrated into Cursor’s platform, according to insiders.
Koala announced it would be shutting down operations this September, as revealed in a blog post published Friday. The decision comes just five months after raising a $15 million Series A round led by CRV, with backing from HubSpot Ventures, Recall Capital, and Afore. The startup, founded nearly four years ago, employed around 30 people and served companies like Vercel, Statsig, and Retool.
This acquisition reflects a growing divide in the AI startup space in 2025. On one side are fast-scaling platforms like Cursor, rapidly growing into formidable competitors to tech giants like Microsoft and Anthropic. On the other side are promising B2B startups like Koala — some with ex-Meta founders and prominent advisors — that burn out quickly despite early momentum.
Cursor is capitalizing on this market shift, absorbing talent from struggling AI startups to build out its own enterprise ecosystem. The company also recently hired Travis McPeak, former CEO of cybersecurity startup Resourcely, to lead its security division, according to a report from The Information.
Cursor’s shift toward the enterprise market
Originally designed as a tool for individual developers, Cursor is now evolving into a full-fledged enterprise platform. Most companies currently rely on GitHub Copilot, Microsoft’s AI assistant embedded in development environments like VS Code and JetBrains. Cursor, on the other hand, is a standalone AI-powered IDE — and in many head-to-head trials, it comes out on top.
Still, Microsoft maintains an edge due to its decades-long relationships with major corporations, along with massive sales and support infrastructures.
To compete, Cursor has aggressively expanded its go-to-market and sales teams. Today, multiple Cursor reps regularly visit Fortune 500 companies, showing them how Cursor’s AI tools can enhance productivity across their engineering departments.
These efforts are paying off. In June 2025, Anysphere announced it surpassed $500 million in annual recurring revenue (ARR), and it’s already working with over half of the Fortune 500 — including giants like Nvidia, Uber, and Adobe. Sources say revenue has continued to grow since then, increasingly fueled by large enterprise contracts.
Fierce competition on All sides
Cursor isn’t just battling Microsoft — it’s also navigating rising threats from across the AI landscape.
One of the biggest is Anthropic, the company behind Claude and the main AI provider powering Cursor’s coding tools. While Cursor relies heavily on Anthropic, it’s also one of its biggest customers — making the relationship mutual but complex.
Meanwhile, Google has just hired the executive team from Windsurf, another AI IDE rival. The rest of Windsurf’s team was snapped up by Cognition, the maker of AI coding agent Devin. The talent grab could give both Google and Cognition an edge in the coming months.
While these tools differ in focus and architecture, employers tend to see them through a similar lens: as AI tools that boost software engineer productivity. And they might be right — companies like Anthropic, Microsoft, Cursor, and Cognition are all racing toward the same end goal: AI agents that can fully automate software development workflows.
Why everyone is chasing AI coding
So why are so many players pouring resources into AI coding tools?
Because it’s one of the first AI categories to hit real product-market fit — the holy grail for startups and investors alike. AI coding tools are now being used daily by millions of developers and are already bringing in serious revenue.
But this race is no longer about just building the smartest tool. It’s about scaling fast, landing enterprise deals, and locking in market share before the dust settles.
And with the likes of Microsoft, Google, and Anthropic already moving at lightning speed, Cursor’s bold acquisition strategy may be what ultimately determines whether it becomes a lasting name in AI — or just another startup that couldn’t scale in time.
