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The startup behind the viral AI coding app Cursor is snapping up top talent from AI enterprise startups in a bid to bolster its competition with Microsoft’s GitHub Copilot and win over businesses looking to supercharge their employees with AI coding tools.

In one recent case, Cursor maker Anysphere struck a deal to acquire the AI-powered customer relationship management (CRM) startup Koala, two sources familiar with the matter told TechCrunch.

As part of the deal, Cursor will bring on several of Koala’s top engineers to build out a dedicated enterprise-readiness team. However, the entire Koala team will not be joining Anysphere, and Cursor does not plan to integrate the startup’s core CRM product, a source told TechCrunch.

Koala plans to shut down in September, the company said in a blog post published on Friday. The announcement comes just five months after Koala raised a $15 million Series A led by CRV, with participation from HubSpot Ventures, Recall Capital and Afore. Koala was nearly four years old, had roughly 30 employees according to LinkedIn, and had worked with clients such as Vercel, Statsig, and Retool.

Sources in this story requested anonymity to speak with TechCrunch about private matters. Koala and its founders did not respond to TechCrunch’s request for comment. Cursor declined to comment.

The Koala deal paints a picture of the two types of AI startups we’re seeing in 2025. There’s Cursor, a juggernaut of an AI tool that is growing so fast it’s starting to encroach on the AI space’s largest players, including Microsoft and Anthropic. At the same time, there’s a growing number of startups like Koala: B2B AI startups that seemed promising — with a co-founder from Meta and advisors like Jack Altman — but have quickly run out of steam.

Cursor is capitalizing on this disparity, leveraging middling AI startups as a means to build out its own enterprise offerings. Anysphere also recently hired the CEO of cybersecurity startup Resourcely, Travis McPeak, to lead the company’s security teams, according to The Information.

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These deals look a lot like Big Tech’s reverse-acquihires, such as Meta’s recent deal to hire Scale AI’s leaders. Much like in Meta and Scale’s deal, Cursor can now move quickly to build out new business segments while leaving questionable businesses behind.

Cursor hopes that Koala and Resourcely’s talent will help it evolve from a personal developer tool that engineers quietly use at work and become an enterprise‑wide platform that companies pay large contracts to access. Most enterprises today that offer employees an AI tool choose Microsoft’s GitHub Copilot, which works as an AI-powered extension to existing integrated development environments (IDEs) such as VS Code or JetBrains.

Cursor, which is a standalone AI-powered IDE, needs to beat out GitHub Copilot to strike deals in many cases, and it often does in head-to-head tests. Still, Microsoft has the upper hand in the enterprise thanks to its long-standing relationships with legacy companies, as well as its large sales, security, and support teams.

In the last year, Cursor has decisively built out its go-to-market and sales team — which now contains dozens of employees. Several Cursor employees now spend their days visiting the offices of Fortune 500 companies and showing them how they can integrate Cursor’s AI tools into their business, according to a person familiar with the matter.

Cursor’s enterprise push seems to be gaining traction. Anysphere said it reached $500 million in ARR in June, and now works with more than half of the Fortune 500, including NVIDIA, Uber, and Adobe. A source familiar with the matter says that revenue has since grown, and an increasingly large share of that growth comes from enterprise deals.

But as Cursor competes with Microsoft, it also needs to fend off a growing field of threats.

The most pressing one is Anthropic, a crucial partner to Anysphere whose Claude Code product has grown rapidly in recent months. Cursor relies heavily on Anthropic’s AI models to power its own coding products. (As one of its biggest customers, Cursor is also vital to Anthropic.)

At the same time, Google just scooped up the leadership team of Windsurf, a major competitor to Cursor in the AI-powered IDE space. Cognition, the maker of the AI coding agent Devin, acquired the rest of Windsurf’s team, potentially offering a significant lift to both businesses.

It’s worth noting that all of these are different types of AI tools, but employers tend to view the products similarly: as AI tools that can improve the productivity of software engineers. These employers might have the right idea. After all, Anthropic, Microsoft, Cursor, and Cognition are all developing AI coding agents which aim to automate workflows completely, which may be where the AI coding space converges.

You might ask, why is everyone competing with everyone else to build AI coding products? Coding tools have become one of the first AI products to find “product market fit” — the elusive goal that makes the ears of venture capitalists perk up. AI coding products are being used daily by millions of software engineers, and they have started to generate real revenue.

Put another way, the race isn’t just about building the best AI coding tool anymore. It’s about who can scale their enterprise operations the fastest while the market is still up for grabs. With the likes of Microsoft, Google, and Anthropic all moving fast, Cursor’s acquisition strategy may determine whether it joins their ranks or becomes another startup that couldn’t scale fast enough.