Replit’s Amjad Masad on the Cursor deal, fighting Apple, and why he’d rather not sell

Amjad Masad has been constructing Replit for a decade, however the final 18 months have been one thing else completely. The AI coding assistant firm went from $2.8 million in income in all of 2024 to monitoring towards what Masad describes as a billion-dollar annual run charge.

At Trendster’s sold-out StrictlyVC occasion in San Francisco on Thursday evening, we coated loads of floor in a short while, starting with the query everybody within the trade is asking proper now: in a world the place rival Cursor is reportedly in talks to be acquired by SpaceX for $60 billion, is Replit additionally certain to promote? We additionally obtained into Replit’s internet income retention — a measure of how a lot present prospects broaden their spending — which Masad says is reaching as excessive as 300%, his willingness to take Apple to court docket over what he referred to as outright lies in its App Retailer battle with Replit, and the opportunity of the corporate starting to spend money on its personal prospects.

On the query of independence, Masad was unambiguous. Not like Cursor, which he mentioned has been working at adverse 23% gross margins, he argued Replit has the economics to make that path viable — even when he stopped wanting ruling out a sale completely.

The next has been edited for size and readability:

TC: Cursor’s reported SpaceX deal was the discuss of the trade final week. What did you make of it?

AM: It’s form of exhausting being an unbiased, smaller AI firm that’s constructing on basis fashions, particularly in case you’re burning a ton of money. A part of the reporting urged Cursor has adverse 23% margins, and in case you’re additionally desirous to spend money on coaching fashions, that makes it extremely exhausting to remain unbiased.

For us at Replit, partly as a result of we goal a special buyer set, we’ve been in a position to run the enterprise extra rationally. We’ve been gross margin constructive for over a 12 months. We’re barely costlier, however we offer much more. Our viewers tends to be largely non-technical customers who beforehand haven’t been in a position to create any software program. We offer an end-to-end platform — from the immediate all the way in which to a deployed utility that may scale. We deal with safety, databases, database migration. And we’ve been doing this lengthy sufficient that we’ve constructed loads of these primitives into the platform.

Is Replit on the market? I might assume you’re speaking with potential acquirers on a regular basis; it’s your fiduciary duty.

Yeah. We’ve got superb companions, and so they generally deliver up these subjects. However we’re going to attempt to keep unbiased. I might love for us to stay an unbiased firm. We’ve been round for 10 years, earlier than it was even accepted that you could possibly make apps simply from concepts. We had been speaking about making a billion software program creators again in 2018 at YC, and other people generally truly laughed at that dream. Now that dream is feasible, and we kicked off this revolution with our agentic coding expertise in September 2024. It simply seems like we will take it a lot additional.

You’re employed intently with Anthropic, Google, and OpenAI. In case you needed to rank them — who’s doing it greatest?

Anthropic remains to be undefeated on the core agentic loop. They’ve one of the best instrument calling; the agent can keep coherent for much longer. GPT-5 is catching up shortly. Google’s Flash household of fashions is simply superb on price-performance. If you need one thing quick and low cost, they’re truly beating open supply proper now. We use all three, and actually I wouldn’t low cost the newer labs both. Reflection AI is popping out with open-source fashions we’re listening to nice issues about. And the Chinese language fashions are spectacular — Kimi is nearly as good as an Anthropic-generation mannequin from January, so it’s solely about three months behind.

Whenever you’re in a bake-off for an enterprise deal, what wins it for you?

Most of our gross sales are inbound or natural — very product-led. We’ve acquired prospects like Zillow and Meta purely by means of individuals adopting the product after which elevating their hand to purchase an enterprise plan. When it does go top-down and there’s a proper bake-off, we normally win on product. However even in circumstances the place we could be lacking a function, as soon as it hits the C-suite and the IT group, Replit wins on safety. A number of vibe-coding instruments will generate a web site and join it to an exterior database — nice merchandise, nevertheless it makes safety a lot more durable, as a result of the database is open to the general public and it’s essential to configure row-level safety, which is very tough for non-technical builders. Replit being full stack, with the database constructed into the challenge and never open to the general public — that makes the app inherently safer.

We additionally spent 10 years battling crypto scammers and hackers, so our cybersecurity perform is nearly as good as a devoted cybersecurity startup. Each time you deploy an app on Replit, we create a completely new remoted challenge on Google Cloud. We inherit Google’s safety mannequin.

Can we discuss churn? How lengthy do you maintain onto prospects if one of the best prototypes ultimately get rebuilt into an organization’s present stack?

Churn could be very, very low, and internet retention is extremely excessive — 300% in some circumstances. What we truly hear from prospects is that when engineers get nervous and attempt to rebuild an app into their very own stack, they typically make it worse. As soon as enterprises get comfy with the complete Replit stack — particularly after we arrange a single-tenant setting for them — they maintain the apps on Replit. Bain & Firm, for instance, changed Tableau and Energy BI with Replit and Databricks.

There’s a rising concern about AI bloat — non-technical customers generate way more code and burn by means of way more tokens. That’s good for you [given your usage-based fees]. What about your prospects?

We don’t have loads of regrettable spend. Enterprises are very ROI acutely aware, and so they inform us concerning the returns they’re getting. For essentially the most half they really feel the funding is completely value it — typically one, two, three orders of magnitude. In the event that they spend $100,000 a month with Replit, they’re normally producing $2 million, $3 million, $10 million in some form of return.

Let’s discuss Apple. One other rival, Lovable, simply obtained an app-building app accredited by the App Retailer this week. Replit has been in App Retailer purgatory, with Apple blocking your updates for months. How a lot does that damage you?

It’s not life or loss of life — we may lose the app and it wouldn’t do something significant to our enterprise. Nevertheless it’s an app individuals genuinely love. We’ve been on the App Retailer for 4 years. Children in underprivileged communities study to code on Replit on their Android units. Executives use it in conferences.

The rationale Replit obtained blocked when others weren’t, we imagine, is that Replit makes iOS apps. After we launched that functionality in December, there have been charts going round exhibiting what number of apps had been moving into the App Retailer by means of us. We expect Apple feels threatened by that.

Apple’s acknowledged motive is that you simply’re downloading new code to the gadget [after the approval process], which violates their tips.

That’s a lie. And we will show it in court docket if now we have to.

Is that going to occur?

I hope not. I’m a fan of Apple, and I’d like to collaborate and construct one thing nice collectively. We’re completely satisfied to ship prospects to Xcode [Apple’s own development environment]. However you’ll be able to’t run a market {that a} billion individuals have entry to and make choices which are discriminatory or primarily based on whims.

Simply questioning if, like Nvidia, OpenAI and others, you’re desirous about investing in your individual prospects in alternate for fairness.

We’ve thought lots about it, and it’s a consideration. I’ve personally invested in a couple of startups that began on Replit earlier than they made any cash. A few of them, like Magic Faculty — a trainer determined to take his time throughout COVID to study slightly little bit of vibe coding and constructed an AI app for different academics. He discovered this drawback that in America, we burn out loads of academics. He needed to make use of AI to cut back the workload. He did that, and he made $20 million within the first 12 months. Different corporations that began on Replit, I feel, are valued at half a billion {dollars}. The entrepreneurship taking place on Replit proper now could be genuinely thrilling. We built-in with Stripe a couple of months in the past, and the transactions flowing by means of Replit are rising triple digits month over month. Fairly quickly, our prospects might be making extra income than we’re.

You may watch our full dialog with Masad beneath: