Cognition, the startup behind the AI coding assistant Devin, announced a $2 billion funding round that values the company at $48 billion. This latest raise comes just four months after a previous funding round that valued the company at $26 billion. Leading the round are prominent venture capital firms including Andreessen Horowitz, Accel, Founders Fund, General Catalyst, and Avenir.
The significant increase in valuation reflects investor belief that the AI coding market remains open for multiple competitors to capture substantial market share. Cognition reported that its annualized run-rate revenue has surged from $492 million in May to $900 million recently. Although the company did not specify how it calculates this figure, run-rate revenue typically extrapolates monthly revenue over a year.
Another notable player, Cursor, was in talks to raise capital at a $50 billion valuation earlier this year before being acquired by SpaceX for $60 billion. At that time, Cursor’s annualized revenue exceeded $2 billion. Cognition’s current revenue multiple surpasses Cursor’s at a similar stage.
Cursor’s acquisition was partly driven by limitations in computing resources, a challenge Cognition may also face. The startup leases a large Nvidia server cluster costing hundreds of millions annually, potentially leading to a cash burn of $800 million this year.
Cognition is developing its own AI model based on open-source technology, aiming to reduce dependence on costly third-party models from providers like OpenAI and Anthropic. This strategy could help lower expenses and move the company toward profitability.
Industry estimates suggest Cognition could reach $4 billion to $5 billion in annualized revenue by the end of 2026. For comparison, Cursor was projected to exceed $6 billion by year-end before its acquisition. The involvement of a16z, a major investor in Cursor, in Cognition’s funding round underscores continued confidence in the sector’s growth potential.
Founded in 2024 by Scott Wu, Cognition has attracted enterprise clients such as Mercedes-Benz, NASA, Goldman Sachs, and Citi, highlighting its growing presence in the AI coding market.