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 what Masad describes as a $1 billion annual run rate.
On TechCrunch sold out Strictly VC Event In San Francisco on Thursday night, we covered a lot of ground in a short time, starting 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 to $60 billionWill Replit also be sold? We also looked at Replit’s net revenue retention, a measure of how much existing customers are increasing their spending, which Masad says is approaching 300%, its willingness to take Apple to court over what it called outright lies in its App Store battle with Replit, and the possibility that the company will start investing in its own customers.
On the question of independence, Masad was unequivocal. Unlike Cursor, which he says has been operating at negative gross margins of 23%, he argued that Replit has the economics to make that path viable, even if he stopped short of ruling out a sale entirely.
The following has been edited for length and clarity:
TC: The SpaceX deal reported by Cursor was the talk of the industry last week. What did you do with that?
AM: It’s a little difficult to be a smaller, independent AI company that relies on basic models, especially if you’re burning a ton of cash. Part of the report suggests that Cursor has negative margins of 23%, and if you also want to invest in training models, that makes it incredibly difficult to stay independent.
For us at Replit, partly because we target a different customer group, we have been able to run the business more rationally. We have had a positive gross margin for over a year. We are a little more expensive, but we offer much more. Our audience tends to be mostly non-technical users who have not previously been able to create any software. We provide an end-to-end platform, from message to a deployed application that can scale. We handle security, databases, database migration. And we’ve been doing this long enough to incorporate many of those primitives into the platform.
Technology event
San Francisco, CA
|
October 13-15, 2026
Is Replit for sale? I assume you’re talking to potential buyers all the time; It is your fiduciary responsibility.
Yes. We have amazing partners and sometimes they raise these issues. But we are going to try to stay independent. I would love for us to remain an independent company. We’ve been around for 10 years, before it was even accepted that you could build apps just from ideas. We were talking about creating a billion software creators in 2018 at YC, and people sometimes laughed at that dream. Now that dream is possible and we are launching this revolution with our agent coding experience in September 2024. It looks like we can go much further.
It works closely with Anthropic, Google and OpenAI. If you had to rank them, who is doing it better?
Anthropic remains undefeated in the central agent circuit. They have the best tool to call; the agent can remain coherent for much longer. GPT-5 is catching up quickly. Google’s Flash model family is simply amazing in terms of price-performance. If you want something fast and cheap, they’re actually outperforming open source right now. We use all three and honestly I wouldn’t rule out the newer labs either. Reflection AI is releasing open source models that we hear great things about. And the Chinese models are impressive: Kimi is as good as a January-generation Anthropic model, so it’s only about three months behind.
When you’re in a competition for a business deal, what’s in it for you?
Most of our sales are inbound or organic, very product-based. We’ve acquired customers like Zillow and Meta simply because people adopted the product and then raised their hand to purchase an enterprise plan. When everything is top-down and there is formal competition, we usually win on the product. But even in cases where we may be missing a feature, once it reaches senior management and the IT group, Replit wins in security. Many vibration coding tools generate a website and connect it to an external database – great products, but they make security much more difficult, because the database is open to the public and security needs to be configured at the row level, which is especially difficult for non-technical builders. Replit is a full stack, with the database built into the project and not open to the public, making the application inherently more secure.
We also spent 10 years fighting hackers and cryptocurrency scammers, so our cybersecurity function is as good as a cybersecurity startup. Every time you deploy an app to Replit, we create a completely new isolated project on Google Cloud. We inherited Google’s security model.
Can we talk about abandonment? How long will customers be retained if the best prototypes are eventually rebuilt into a company’s existing stack?
Attrition is very, very low and net retention is incredibly high: 300% in some cases. What we really hear from customers is that when engineers get nervous and try to rebuild an application in their own stack, they often make it worse. Once companies are comfortable with the full Replit stack, especially when we set up a single tenant environment for them, they keep applications on Replit. Bain & Company, for example, replaced Tableau and Power BI with Replit and Databricks.
There is growing concern about AI overkill: non-technical users generate much more code and consume many more tokens. That’s good for you (given their usage-based rates). What about your clients?
We don’t have many regrettable expenses. Companies are very aware of the return on investment and they tell us about the returns they get. For the most part they feel that the investment is worth it, often one, two or three orders of magnitude. If they spend $100,000 a month on Replit, they typically generate some type of return of $2 million, $3 million, or $10 million.
Let’s talk about Apple. Another rival, Lovable, just got a app builder app approved by the App Store this week. Replit has been in App Store purgatory, with Apple blocking its updates for months. How much does that hurt you?
It’s not a matter of life or death: we could lose the application and it wouldn’t add anything meaningful to our business. But it’s an app that people really love. We have been in the App Store for four years. Children from disadvantaged communities learn to code in Replit on their Android devices. Executives use it in meetings.
We believe the reason Replit was blocked when others were not is that Replit makes apps for iOS. When we launched that capability in December, there were charts showing how many apps were coming into the App Store through us. We think Apple feels threatened by that.
Apple’s stated reason is that you are downloading new code to the device (after the approval process), which violates their guidelines.
That’s a lie. And we can prove it in court if necessary.
Is that going to happen?
I hope not. I’m an Apple fan and would love to collaborate and create something great together. We are happy to send clients to Xcode (Apple’s own development environment). But you cannot manage a market to which one billion people have access and make discriminatory decisions or decisions based on whims.
I wonder if, like Nvidia, OpenAI and others, it is thinking about investing in its own customers in exchange for capital.
We’ve thought about it a lot and it’s a consideration. I have personally invested in a few startups that started on Replit before making money. Some of them, like Magic School, one teacher decided to take his time during COVID to learn some vibe coding and created an AI app for other teachers. He found the problem that in the United States we burn many teachers. I wanted to use AI to reduce workload. He did it and made $20 million in the first year. I think other companies that started with Replit are valued at $500 million. The entrepreneurship happening at Replit right now is really exciting. We integrated with Stripe a few months ago and transactions flowing through Replit are growing by triple digits month over month. Very soon, our clients will earn more income than we do.
You can watch our full conversation with Masad below:
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
