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Amjad Masad has been building Replit for a decade, but the last 18 months have been something else entirely. The AI coding assistant company went from $2.8 million in revenue in all of 2024 to tracking toward what Masad describes as a billion-dollar annual run rate.<\/p>\n
At TechCrunch\u2019s sold-out StrictlyVC event in San Francisco on Thursday night, we covered a lot of ground in a short time, beginning with the question everyone in the industry is asking right now: in a world where rival Cursor is reportedly in talks to be acquired by SpaceX for $60 billion, is Replit also bound to sell? We also got into Replit\u2019s net revenue retention \u2014 a measure of how much existing customers expand their spending \u2014 which Masad says is reaching as high as 300%, his willingness to take Apple to court over what he called outright lies in its App Store battle with Replit, and the possibility of the company beginning to invest in its own customers.<\/p>\n
On the question of independence, Masad was unambiguous. Unlike Cursor, which he said has been operating at negative 23% gross margins, he argued Replit has the economics to make that path viable \u2014 even if he stopped short of ruling out a sale entirely.<\/p>\n
The following has been edited for length and clarity:<\/p>\n
TC: Cursor\u2019s reported SpaceX deal was the talk of the industry last week. What did you make of it?<\/strong><\/p>\n AM: It\u2019s kind of hard being an independent, smaller AI company that\u2019s building on foundation models, especially if you\u2019re burning a ton of cash. Part of the reporting suggested Cursor has negative 23% margins, and if you\u2019re also wanting to invest in training models, that makes it incredibly hard to stay independent.<\/p>\n For us at Replit, partly because we target a different customer set, we\u2019ve been able to run the business more rationally. We\u2019ve been gross margin positive for over a year. We\u2019re slightly more expensive, but we provide a lot more. Our audience tends to be mostly non-technical users who previously haven\u2019t been able to create any software. We provide an end-to-end platform \u2014 from the prompt all the way to a deployed application that can scale. We handle security, databases, database migration. And we\u2019ve been doing this long enough that we\u2019ve built a lot of those primitives into the platform.<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco, CA<\/span> Is Replit for sale? I would assume you are talking with potential acquirers all the time; it\u2019s your fiduciary responsibility.<\/strong><\/p>\n Yeah. We have amazing partners, and they sometimes bring up these topics. But we\u2019re going to try to stay independent. I would love for us to remain an independent company. We\u2019ve been around for 10 years, before it was even accepted that you could make apps just from ideas. We were talking about creating a billion software creators back in 2018 at YC, and people sometimes actually laughed at that dream. Now that dream is possible, and we kicked off this revolution with our agentic coding experience in September 2024. It just feels like we can take it much further.<\/p>\n You work closely with Anthropic, Google, and OpenAI. If you had to rank them \u2014 who\u2019s doing it best?<\/strong><\/p>\n Anthropic is still undefeated on the core agentic loop. They have the best tool calling; the agent can stay coherent much longer. GPT-5 is catching up quickly. Google\u2019s Flash family of models is just amazing on price-performance. If you want something fast and cheap, they\u2019re actually beating open source right now. We use all three, and honestly I wouldn\u2019t discount the newer labs either. Reflection AI is coming out with open-source models we\u2019re hearing great things about. And the Chinese models are impressive \u2014 Kimi is as good as an Anthropic-generation model from January, so it\u2019s only about three months behind.<\/p>\n When you\u2019re in a bake-off for an enterprise deal, what wins it for you?<\/strong><\/p>\n Most of our sales are inbound or organic \u2014 very product-led. We\u2019ve acquired customers like Zillow and Meta purely through people adopting the product and then raising their hand to buy an enterprise plan. When it does go top-down and there\u2019s a formal bake-off, we usually win on product. But even in cases where we might be missing a feature, once it hits the C-suite and the IT group, Replit wins on security. A lot of vibe-coding tools will generate a website and connect it to an external database \u2014 great products, but it makes security much harder, because the database is open to the public and you need to configure row-level security, which is especially difficult for non-technical builders. Replit being full stack, with the database built into the project and not open to the public \u2014 that makes the app inherently more secure.<\/p>\n We also spent 10 years battling crypto scammers and hackers, so our cybersecurity function is as good as a dedicated cybersecurity startup. Every time you deploy an app on Replit, we create an entirely new isolated project on Google Cloud. We inherit Google\u2019s security model.<\/p>\n Can we talk about churn? How long do you hold onto customers if the best prototypes eventually get rebuilt into a company\u2019s existing stack?<\/strong><\/p>\n Churn is very, very low, and net retention is incredibly high \u2014 300% in some cases. What we actually hear from customers is that when engineers get nervous and try to rebuild an app into their own stack, they often make it worse. Once enterprises get comfortable with the full Replit stack \u2014 especially when we set up a single-tenant environment for them \u2014 they keep the apps on Replit. Bain & Company, for example, replaced Tableau and Power BI with Replit and Databricks.<\/p>\n There\u2019s a growing concern about AI bloat \u2014 non-technical users generate far more code and burn through far more tokens. That\u2019s good for you [given your usage-based fees]. What about your customers?<\/strong><\/p>\n We don\u2019t have a lot of regrettable spend. Enterprises are very ROI conscious, and they tell us about the returns they\u2019re getting. For the most part they feel the investment is totally worth it \u2014 often one, two, three orders of magnitude. If they spend $100,000 a month with Replit, they\u2019re usually generating $2 million, $3 million, $10 million in some kind of return. <\/p>\n Let\u2019s talk about Apple. Another rival, Lovable, just got an app-building app approved by the App Store this week. Replit has been in App Store purgatory, with Apple blocking your updates for months. How much does that hurt you?<\/strong><\/p>\n It\u2019s not life or death \u2014 we could lose the app and it wouldn\u2019t do anything meaningful to our business. But it\u2019s an app people genuinely love. We\u2019ve been on the App Store for four years. Kids in underprivileged communities learn to code on Replit on their Android devices. Executives use it in meetings.<\/p>\n The reason Replit got blocked when others weren\u2019t, we believe, is that Replit makes iOS apps. When we launched that capability in December, there were charts going around showing how many apps were getting into the App Store through us. We think Apple feels threatened by that.<\/p>\n Apple\u2019s stated reason is that you\u2019re downloading new code to the device [after the approval process], which violates their guidelines.<\/strong><\/p>\n That\u2019s a lie. And we can prove it in court if we have to.<\/p>\n Is that going to happen?<\/strong><\/p>\n I hope not. I\u2019m a fan of Apple, and I\u2019d love to collaborate and build something great together. We\u2019re happy to send customers to Xcode [Apple\u2019s own development environment]. But you can\u2019t run a marketplace that a billion people have access to and make decisions that are discriminatory or based on whims.<\/p>\n Just wondering if, like Nvidia, OpenAI and others, you\u2019re thinking about investing in your own customers in exchange for equity. <\/strong><\/p>\n We\u2019ve thought a lot about it, and it is a consideration. I\u2019ve personally invested in a few startups that started on Replit before they made any money. Some of them, like Magic School \u2014 a teacher decided to take his time during COVID to learn a little bit of vibe coding and built an AI app for other teachers. He found this problem that in America, we burn out a lot of teachers. He wanted to use AI to reduce the workload. He did that, and he made $20 million in the first year. Other companies that started on Replit, I think, are valued at half a billion dollars. The entrepreneurship happening on Replit right now is genuinely exciting. We integrated with Stripe a few months ago, and the transactions flowing through Replit are growing triple digits month over month. Pretty soon, our customers will be making more revenue than we are.<\/p>\n You can watch our full conversation with Masad below:<\/em><\/p>\n \n
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