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 for all of 2024 to tracking toward what Masad describes as a billion-dollar annual run rate.
At TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday night, we covered a lot of ground in a short amount of 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 for $60 billion, is it obligated to sell Replit, too? We also came up with Replit’s net revenue retention — a measure of how much existing customers are increasing their spending — which Masad says is as high as 300%, his willingness to take Apple to court over what he called clearly lies in the App Store’s battle with Replit and the company’s ability to start investing in its own customers.
On the issue of independence, Masad was clear. Unlike Cursor, which said it was operating at negative gross margins of 23%, he argued that Replit has the financials to make that path viable — even if it doesn’t completely rule out a sale.
The following has been edited for length and clarity:
TC: Cursor’s reported deal for SpaceX was the talk of the industry last week. What did you understand?
AM: It’s kind of hard to be an independent, smaller AI company based on foundation models, especially if you’re burning through a ton of cash. Part of the report suggests Runner 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 set of customers, we’ve been able to run the business more rationally. We have been positive gross margin for more than a year. We are a little more expensive, but we provide much more. Our audience tends to be mostly non-technical users who haven’t had the ability to build software in the past. We provide an end-to-end platform — from prompt to a developed, scalable application. We handle security, databases, database migration. And we’ve been doing this long enough that we’ve integrated many of these primitives into the platform.
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Is Replit for sale? I’m going to assume that you talk to potential buyers all the time. it is your fiduciary responsibility.
Yes. We have amazing partners and sometimes they report on these issues. But we will try to remain independent. I would love to remain an independent company. We’ve been around for 10 years, before it was even accepted that you could build apps from just ideas. We were talking about making a billion software creators in 2018 at YC, and people sometimes actually laughed at that dream. Now that dream is possible and we started this revolution with our agent coding experience in September 2024. It just looks like we can take it a lot further.
You work closely with Anthropic, Google and OpenAI. If you had to rank them — who does it better?
Anthropic is still undefeated in the main factor. Do they have the best dialer? the agent can remain coherent much longer. GPT-5 is fast approaching. Google’s family of Flash templates is simply amazing value for money. If you want something fast and cheap, open source is actually winning right now. We use all three, and honestly I wouldn’t discount the newer labs either. Reflection AI comes with open source models that we hear great things about. And the Chinese models are impressive — Kimi is as good as an Anthropic generation model from January, so she’s only three months behind.
When you’re on the hunt for a business deal, what wins you over?
Most of our sales are inbound or organic — very product-based. We’ve gotten customers like Zillow and Meta purely through people adopting the product and then raising their hand to buy a business plan. When it does go from top to bottom and there is a formal bake off, we usually win on the product. But even in cases where we might be missing a feature, once it reaches the C-suite and IT team, Replit wins in security. A lot of vibe coding tools will build a website and connect it to an external database — great products, but it makes security much more difficult because the database is open to the public and you have to configure security at the row level, which is especially difficult for non-technical builders. Replit is full stack, with the database built into the project and not open to the public — this makes the app inherently more secure.
We’ve also spent 10 years fighting crypto fraudsters and hackers, so our cybersecurity operation is as good as a dedicated cybersecurity startup. Every time you develop an app on Replit, we create an entirely new isolated project in Google Cloud. We inherit Google’s security model.
Can we talk about a twist? How long do you keep customers if the best prototypes end up being rebuilt into a company’s existing stack?
Churn 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 frustrated and try to rebuild an app on their own stack, they often make it worse. Once businesses are comfortable with the full Replit stack — especially when we set up a single-tenant environment for them — they keep the applications on Replit. Bain & Company, for example, replaced Tableau and Power BI with Replit and Databricks.
There is a growing concern about AI bloat – non-technical users are producing far more code and burning through far more tokens. This is good for you [given your usage-based fees]. What about your customers?
We don’t have a lot of regrettable expenses. Businesses are very aware of ROI and tell us about the returns they get. For the most part they think the investment is worth it – often one, two, three orders of magnitude. If they’re spending $100,000 a month with Replit, they’re usually generating $2 million, $3 million, $10 million in some kind of return.
Let’s talk about Apple. Another rival, Lovable, just got an app builder app approved by the App Store this week. Replit is in App Store purgatory, with Apple blocking your updates for months. How much does this hurt you?
It’s not life or death — we could lose the app and it wouldn’t do anything important to our business. But it is an app that people really love. We’ve been on the App Store for four years. Kids in underprivileged communities learn to code in Replit on their Android devices. Executives use it in meetings.
The reason Replit was banned when others weren’t, we believe, is that Replit builds iOS apps. When we introduced this feature in December, there were charts showing how many apps were entering the App Store through us. We think Apple feels threatened by this.
Apple’s stated reason is that you are downloading new code to the device [after the approval process]which violates their instructions.
This is a lie. And we can prove it in court if necessary.
Will this happen?
I hope not. I’m an Apple fan and I’d love to work together and make something great together. We are happy to send customers to Xcode [Apple’s own development environment]. But you can’t run a marketplace accessed by a billion people and make decisions that are discriminatory or based on whim.
Just wondering if, like Nvidia, OpenAI and others, you are considering investing in your own customers in exchange for equity.
We’ve given it a lot of thought and it’s a thought. I have personally invested in a few startups that started on Replit before they made money. Some of them, like Magic School — a teacher decided to take his time during COVID to learn some vibe coding and created an AI app for other teachers. He found this problem that in America, we burn out a lot of teachers. He wanted to use artificial intelligence to reduce the workload. He did this and made $20 million in the first year. Other companies that have started on Replit are, I think, valued at half a billion dollars. 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 triple digits month over month. Pretty soon, our customers will be making more money than we are.
You can watch our entire conversation with Masad below:
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