Nov 13 (Reuters) - Code-generation startup Cursor nearly

tripled its valuation to $29.3 billion in five months after

raising $2.3 billion in its latest funding round, as artificial

intelligence companies continue to attract investor attention.

The Series D funding round was led by new investor Coatue,

an investment management firm, and existing investor Accel,

Cursor said in a blog post on Thursday. Fresh investors Nvidia ( NVDA )

and Alphabet's Google also participated in

the round.

AI firms have dominated private funding markets this year,

with global venture funding in the third quarter increasing 38%

year-over-year to $97 billion, about half of which went to AI

companies, according to data from Crunchbase.

"(The round) is a resounding current affirmation of AI

prospects...but the commitments for this raise most likely

accumulated over the last several weeks or months and are very

specific to Cursor's prospects," said Michael Ashley Schulman,

chief investment officer at Running Point Capital Advisors.

A surge in investor appetite for AI-linked firms also helped

drive Wall Street's benchmark indexes to record highs this year.

The San Francisco-based company raised $900 million in June

at a $9.9 billion valuation, attracting backing from investors,

including Thrive Capital, Andreessen Horowitz and Accel.

The company has crossed $1 billion in annualized revenue,

with sales-led revenue increasing 100-fold since the beginning

of 2025, Cursor said in a mailed statement to Reuters.

Cursor, which develops tools to autonomously generate and

complete code, said the latest funding round will be used to

invest in its research efforts.

Code-generation startups are attracting sky-high valuations

as businesses explore artificial intelligence-based solutions to

enhance or replace traditional software development roles.

However, investor concerns that valuations of AI companies

may have outpaced fundamentals intensified after SoftBank Group

offloaded its $5.8 billion stake in Nvidia ( NVDA ) earlier in the week.