Benchmark, Index, others are in an unsolicited bidding war with Anysphere, the maker of Cursor.

There is no shortage of AI-powered coding assistance startups. They include Augment, Codeium, Magic, and Poolside.

However, Cursor has become one of the most popular. Its developer, Anysphere, saw revenue grow from $4 million in annual recurring revenue (ARR) in April to $4 million per month from last month, according to a person with direct knowledge of the company’s finances. The company is experiencing rapid user adoption and growth compared to other coding assistant providers, another person said.

Such rapid growth has VCs flocking to it. Anysphere received unsolicited offers valuing the company at up to $2.5 billion from Benchmark, Index Ventures, and previous investors Andreessen Horowitz and Thrive, among others, the person said.

Index Ventures declined to comment. Anysphere, Benchmark, Andreessen Horowitz, and Thrive did not respond to requests for comment.

Interest in this company exploded so quickly that last week, unsolicited offers started at an estimate of $1.5 billion, but have already risen to $2.5 billion, said a person with direct knowledge of the company. Sources also told Information that investors are willing to value the company for 2.5 billion dollars.

This compares to Anysphere’s $400 million valuation from four months ago, when it raised a $60 million Series A round led by Andreessen Horowitz and Thrive. Patrick Collison, the founder of Stripe, also joined the round.

The company was founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark and Aman Sanger while they were students at MIT. Last year, Anysphere graduated from the OpenAI accelerator program and became its most prominent graduate. The company then raised $8 million in seed funding led by OpenAI’s Startup Fund, with participation from former GitHub CEO Nat Friedman, and Dropbox founder Arash Ferdowsi.

Most developers are already using coding assistants like Cursor, and some VCs expect these tools will soon allow startups to hire fewer software developers.