Cognition AI, developer of the artificial intelligence (AI) coding agent Devin, has finalized a $400 million funding round, achieving a post-money valuation of $10.2 billion. This funding marks a significant increase from the company's $4 billion valuation earlier this year, as reported by Bloomberg. The raise positions Cognition AI as a prominent entity in the rapidly evolving landscape of AI-driven development.
The latest investment round was led by Founders Fund, the venture capital firm known for its early-stage technology investments. Participation also came from existing investors, including Lux Capital, Joe Lonsdale's 8VC, Elad Gil, Definition Capital, and Swish Ventures. This capital infusion arrives during a period characterized by intense competition and evolving market dynamics within the AI sector, according to market observers.
The funding follows a period of substantial commercial growth for Cognition AI's core product, Devin. Annual recurring revenue (ARR) generated by the AI coding agent climbed to $73 million in June, a considerable rise from $1 million in September 2024. Despite this rapid expansion in revenue, the company's net burn has reportedly remained under $20 million since its establishment two years ago, as detailed by Bloomberg.
In a strategic expansion move earlier this year, Cognition AI acquired Windsurf, another AI coding startup, in July. This acquisition occurred just days after Google reportedly recruited Windsurf's CEO, co-founder, and research leads, a move that predated the acquisition. The transaction integrated Windsurf's technology and remaining personnel into Cognition AI's operational structure, aiming to augment its development capabilities.
Concurrent with its financial and operational growth, Cognition AI implemented workforce adjustments in August. The company laid off 30 staffers and subsequently offered buyouts to its remaining 200 employees. This action followed reports detailing demanding work expectations within the company, which included requirements for 80-hour, six-day work weeks for its staff.
