Codeium Eyes $2.85 Billion Valuation Amid New Funding Round

Codeium, an AI-powered coding startup, is in discussions to raise a new round of funding at an impressive $2.85 billion valuation. Founded in 2021 by MIT graduates and childhood friends Varun Mohan and Douglas Chen, Codeium has quickly established itself as a formidable player in the AI coding space. The company has achieved approximately $30 million in annualized recurring revenue (ARR) and boasts a free tier of its platform used by over 1,000 enterprise customers, including notable names like Anduril, Zillow, and Dell.

Chen, who previously worked at Meta developing software tools for VR headsets such as the Oculus Quest, brings valuable experience to Codeium. The startup competes with other AI-powered coding assistants like Anysphere, Poolside, Magic, and GitHub Copilot. Despite this competition, Codeium's growth trajectory remains strong, evidenced by its significant valuation of roughly 95 times its ARR.

In November, Codeium unveiled the Windsurfer Editor, a tool capable of writing some code independently. This feature utilizes an "agentic AI" approach, or "agent mode," showcasing the company's innovative edge in the tech landscape. This development aligns with Codeium's strategy to enhance coding efficiency without full human intervention, setting it apart from competitors.

The upcoming funding round will see participation from Kleiner Perkins, a returning investor. Previously, Codeium closed a $150 million Series C round in 2022 at a $1.25 billion post-money valuation. The Series C was led by General Catalyst with contributions from Kleiner Perkins and Greenoaks, highlighting the sustained investor interest in Codeium's potential.

Codeium's valuation multiple stands at 25 times ARR, based on its reported $100 million in revenue. This figure underscores the market's confidence in the startup's ability to scale and innovate within the AI-driven coding sector. The company's rapid growth and substantial enterprise adoption signal its readiness to expand further and solidify its position as a leader in AI-powered coding solutions.