Replit, the fast-growing service that combines artificial intelligence with software development, closed a $97.4 million fundraising round that valued the startup at $1.2 billion, a 50% jump from its last investment cycle.
The funding, led by some of the most prominent venture capital firms like Andreessen Horowitz, Khosla Ventures, and Coatue, reflects the 7-year-old company’s surging popularity in AI-assisted coding.
Replit exclusively told Semafor its user base has grown to 22.5 million developers, more than double the number it had in December 2021, when it announced a previous investment round.
Replit co-founder and CEO Amjad Masad said the influx of capital will expand the company’s 85-person team and resources to attract bigger players to the platform.
“It’s become this lightning rod for AI-assisted software,” he said. “We’re ready to become a place where people can host production-ready, mission-critical applications and to power entire teams,” he said.
One of Replit’s biggest competitors is GitHub, a code repository and service for developers with around 100 million users. It had 33 million developers on the platform when it was acquired by Microsoft in 2018 for $7.5 billion, 10 years after it was founded.
Replit developers have created 235 million projects on the platform, the company said.
On Tuesday, Replit is set to host a “developer day,” where Masad said it will unveil new product capabilities.
He said the company is still in growth mode, but there are promising signs on the revenue front. It facilitates “bounties” that companies and individuals can pay developers-for-hire to complete coding products, and customers also pay Replit for compute power, he said.
Investors in Replit’s new fundraising round also include SV Angel, Y Combinator, Bloomberg Beta and AngelList cofounder Naval Ravikant.
Replit is an important company to watch because its service is centered in the beating heart of the AI space, at the intersection of software development and artificial intelligence.
Competitors like OpenAI, which powers GitHub’s “Copilot” software development tool, know that, too. It’s why, as Semafor previously reported, OpenAI hired an army of coders around the world to help train and improve its algorithms.
It’s possible that at some point Replit and companies like it will make it possible for people with little to no technical experience to write complex software programs.
More likely, especially in the short term, is that AI-assisted software development will make it possible for experienced developers to do more with less. Masad has previously predicted that it will lead to one-person billion-dollar companies.
That prediction seems plausible. Software development involves hours of painstaking busywork.
Developers have embraced AI more than probably any other industry, and that will only increase the speed at which the technology improves, as companies like Replit use the feedback from developers to enhance their products.
Room for Disagreement
Replit is growing quickly, but it’s up against OpenAI, the fastest-growing consumer product. Ever.
Coders also use ChatGPT to create software and OpenAI has the vast resources that come with a partnership with Microsoft.
If Microsoft and OpenAI see Replit as a threat, they may try to crush the competition.
To win, Replit may have to leapfrog OpenAI’s capabilities — a tall order for any company, no matter how big.