The value of a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, has skyrocketed to approximately $3 billion following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This substantial increase in value has brought attention to the significant missed recovery in crypto history.
SpaceX's acquisition is part of Elon Musk's strategy to bridge the gap with competitors in the AI coding tools sector. The deal includes the option for SpaceX to purchase Cursor later this year for $60 billion or pay $10 billion if the full acquisition does not proceed. The company's planned initial public offering, targeting a $2 trillion valuation, has led to a delay in the immediate acquisition, with the $10 billion serving as a breakup fee. The crypto aspect of the deal is linked to Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022.
This investment, which bought roughly 5% of the company at a $4 million valuation, was sold by the FTX estate for the same amount a year later. The significant disparity between the sale price and the current valuation of $3 billion represents a 15,000x return, which was realized by the buyer rather than the creditors. This event has raised questions about the timing of the FTX bankruptcy administration and the decision to liquidate assets quickly. Sam Bankman-Fried, currently serving a 25-year federal sentence, has argued that the estate's actions destroyed billions in value and that customers could have been made whole if the process had been handled differently.
The trajectory of Cursor's valuation from its launch in early 2023 to its current valuation is among the steepest in software startup history. While FTX customers have been repaid in dollar terms under the bankruptcy's distribution plan, they did not receive the upside from the assets' increased value, including the $3 billion forgone recovery from the Cursor stake.