AI-coding startup Codeium in talks to raise at an almost $3B valuation, sources say

Codeium, an AI-powered coding startup, is in the process of securing a new round of funding valued at $2.85 billion, with additional capital infusion, as disclosed by two sources familiar with the transaction.

The funding round is spearheaded by Kleiner Perkins, a returning investor, as mentioned by the sources.

This latest funding round follows closely on the heels of Codeium’s previous achievement just six months ago, where they successfully closed a $150 million Series C round at a post-money valuation of $1.25 billion. The round was led by General Catalyst, with participation from Kleiner Perkins and Greenoaks. However, the exact amount of the new funding remains unconfirmed at this time.

Despite requests for comment, both Codeium and Kleiner Perkins have not provided any responses.

Sources indicate that the company has achieved an annualized recurring revenue (ARR) of approximately $40 million. With this revenue figure in mind, Codeium’s implied valuation stands at around 70 times ARR, a significantly higher multiple compared to other AI code editing companies in the industry.

In a recent development, Anysphere, the creator of the AI-powered coding assistant Cursor, announced a new funding round at a $2.5 billion valuation, based on reported revenue of $100 million. This valuation was determined using a 25 times ARR multiple.

Aside from Anysphere, considered a frontrunner in the category by many investors, Codeium faces competition from other players such as Poolside, Magic, Microsoft’s GitHub Copilot, among others.

While the specifics of how Codeium secured such a lucrative valuation remain unclear, sources suggest that the company was not actively seeking new funding until approached by interested investors.

Codeium differentiates itself from competitors by targeting companies rather than individual developers. The company previously reported that over 1,000 enterprise customers, including Anduril, Zillow, and Dell, were utilizing the free tier of its platform.

In a recent update, Codeium introduced the Windsurf Editor, capable of autonomously generating code without human intervention, a concept known as agentic AI or “agent mode.” Similar features are also offered by competitors like Cursor.

Established in 2021 by Varun Mohan and Douglas Chen, childhood friends and MIT graduates, Codeium boasts a team with extensive experience. Prior to founding Codeium, Chen contributed to software development for VR headsets at Meta, while Mohan led the autonomy infrastructure team at Nuro, an autonomous delivery startup.