At the beginning of this month, developers using Cursor were met with surprise charges after the company overhauled its $20 monthly subscription, shifting from unlimited model access to a capped plan with extra fees for overages. Some users hit rate limits after just a few prompts, criticizing the new pricing as “obscure” and “underhanded.” (Cursor’s CEO Michael Truell later issued an apology for the rollout). Meanwhile, when Anthropic quietly imposed weekly usage caps on Claude Code, heavy users were left confused, arguing the usage metrics didn’t reflect actual consumption.

This growing frustration over unclear AI coding tool pricing is a real and expanding issue, says Saoud Rizwan, founder and CEO of Cline, an open-source AI coding assistant. Many developers find themselves stuck on $200 monthly plans, limiting their ability to experiment with newer or alternative AI models. In October 2024, Rizwan launched Cline to offer greater billing transparency and make diverse AI model access more affordable for coders.

Cline integrates directly into popular code editors such as VSCode and Cursor, giving developers freedom to use the AI models they prefer—without worrying about hidden caps. Users pay providers like Anthropic, Google, or OpenAI directly for model inference (the cost of running AI models), while Cline delivers a detailed cost breakdown for every request.

Being open source, Cline allows full visibility into its inner workings, so users can verify exactly how costs are calculated—something not possible with closed-source AI tools. “You can actually see what’s going on behind the scenes, which builds trust,” said Nick Baumann, Cline’s product marketing lead.

Functionally, it works like other AI coding assistants: developers type natural language prompts describing the code they need and specify which model to use. Cline then reads files, analyzes codebases, and generates the requested code. The key difference? Complete cost transparency and the freedom to choose any model for any task.

Since launching in October, Cline has reached 2.7 million installs. This week, the company announced a $27 million Series A round led by Emergence, with participation from Pace Capital and 1984 Ventures, bringing its valuation to $110 million. Rizwan plans to use the funds to commercialize Cline’s open-source core by introducing premium features tailored for enterprise clients—including early adopters like Samsung and SAP.

Cline faces stiff competition from well-funded rivals like Cognition, reportedly in talks to raise over $300 million at a $10 billion valuation, and Cursor, which claims over $500 million in annualized subscription revenue.

But Rizwan, 28, argues that Cline’s business model sets it apart in the crowded AI coding space. He claims companies like Cursor rely on $20/month subscriptions that are heavily subsidized, cutting costs by routing user queries to cheaper models. Cline, in contrast, “isn’t playing that game,” he said. “We take zero margin on AI usage. We’re simply routing inference requests.”

This approach convinced Emergence partner Yaz El-Baba to lead the investment. He told Forbes that because Cline doesn’t profit from inference, it has no reason to compromise model quality or steer users toward cheaper options.

“Other players have raised massive funding to subsidize their way into dominance, bundling inference into subscription fees far below actual costs,” El-Baba said. “That’s simply not sustainable.” With Cline, developers know exactly what they're paying for, maintain control over costs, and can decide where to send sensitive data like proprietary code.

Cline began as a side project for the June 2024 “Build with Claude” hackathon hosted by Anthropic. Though Rizwan didn’t win, his AI agent gained traction online, drawing attention and early users. By November, he had secured $5 million in seed funding and relocated from Indiana to San Francisco to scale the startup. “I realized I’d stumbled into something much bigger,” he said.

As AI coding platforms grapple with sustainable pricing models, Rizwan sees a strategic opening to pitch Cline to large enterprises. His bet? That openness and transparency will win in the long run. “Cline is open source, so you can inspect the internals and see exactly how the tool interacts with models—critical for price control and trust.”

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