Codeium, a startup that leverages AI for coding, is currently in the process of securing a new funding round, valued at $2.85 billion, including the injection of fresh capital, as confirmed by two sources familiar with the deal.

According to the people involved, the funding round is being spearheaded by Kleiner Perkins, an investor that has previously supported Codeium.

This new round of funding comes approximately six months after Codeium, based in Silicon Valley, announced the successful closure of a $150 million Series C funding round at a post-money valuation of $1.25 billion, led by General Catalyst and participated in by Kleiner Perkins and Greenoaks. Although the exact amount of the new funding could not be confirmed by TechCrunch, the development signifies a noteworthy increase in valuation for Codeium.

Neither Codeium nor Kleiner Perkins has provided a comment on the matter in response to requests.

As per one source, Codeium has achieved approximately $40 million in annualized recurring revenue (ARR). Based on this revenue figure, the implied valuation of Codeium stands at roughly 95 times ARR, a multiple significantly higher than that of other companies in the AI code editing space.

For comparison, Anysphere, the company behind the AI-powered coding assistant Cursor, recently announced a funding round that valued the company at $2.5 billion. Given its reported $100 million in revenue, Anysphere’s valuation multiple is approximately 25 times ARR, as highlighted in a recent report.

Codeium operates in a competitive landscape that includes Anysphere, widely regarded as a leader in the category, as well as Poolside, Magic, Microsoft’s GitHub Copilot, and numerous other players in the AI code editing market.

Although the specifics of how Codeium negotiated such a high valuation are unclear, sources close to the matter have indicated to TechCrunch that the company was not actively seeking new funding before being approached by investors about this round.

Codeium differentiates itself from competitors by focusing on serving companies rather than individual developers. Last summer, the company shared with TechCrunch that over 1,000 enterprise customers, including notable names such as Anduril, Zillow, and Dell, were utilizing the free tier of its platform.

In November, Codeium introduced Windsurf Editor, a feature capable of writing certain code segments without human intervention, leveraging what is known as agentic AI or “agent mode.” This feature is also offered by competitors like Cursor.

Codeium was founded in 2021 by Varun Mohan and Douglas Chen, childhood friends and fellow MIT graduates. Before co-founding Codeium, Chen was at Meta, where he played a role in developing software tools for VR headsets, including the Oculus Quest. Mohan previously served as a tech lead at Nuro, an autonomous delivery startup, where he was responsible for managing the autonomy infrastructure team.