Amjad Masad has been developing Replit for ten years, but the past 18 months have been truly extraordinary. The AI coding assistant firm escalated from $2.8 million in revenue throughout 2024 to moving toward what Masad describes as a billion-dollar annual run rate.

At TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday evening, we explored a variety of topics quickly, starting with the pertinent question on everyone’s mind: in an environment where competitor Cursor is allegedly negotiating an acquisition by SpaceX for $60 billion, is Replit also destined for a sale?

We also discussed Replit’s net revenue retention — an indicator of how much current clients increase their purchases — which Masad claims has reached as high as 300%, his readiness to take Apple to court over what he terms blatant falsehoods in its App Store conflict with Replit, and the potential for the company to begin investing in its clients.

On the topic of independence, Masad was resolute. Unlike Cursor, which he claimed has been operating at negative 23% gross margins, he contended that Replit possesses the economic framework to make that journey feasible — even though he stopped short of completely dismissing the idea of a sale.

The following has been condensed for brevity and clarity:

TC: Cursor’s rumored SpaceX deal was the buzz of the industry last week. What are your thoughts on it?

AM: It’s quite challenging being an independent, smaller AI firm that’s building on foundational models, especially if you’re spending a lot of money. Part of the reports indicated Cursor has negative 23% margins, and if you’re also looking to invest in training models, it becomes incredibly tough to maintain independence.

For us at Replit, partly due to our focus on a different customer demographic, we’ve managed to operate the business more logically. We’ve been gross margin positive for over a year. We’re somewhat pricier, but we offer significantly more. Our target audience mainly consists of non-technical users who previously lacked the ability to create software. We provide a comprehensive platform — from the prompt all the way to a deployed application that can scale. We take care of security, databases, and database migration. And we’ve been doing this long enough to have integrated many of those essentials into the platform.

Is Replit for sale? I would think you are consulting with potential buyers frequently; it’s your fiduciary duty.

Indeed. We have fantastic partners, and they occasionally raise these subjects. However, we aim to maintain our independence. I would love for us to continue as an independent entity. We’ve existed for a decade, long before it was acknowledged that you could develop apps solely from concepts. We discussed creating a billion software creators back in 2018 at YC, and some people actually laughed at that vision. Now that aspiration is attainable, and we sparked this revolution with our agentic coding experience in September 2024. It genuinely feels like we can advance it far beyond.

You collaborate closely with Anthropic, Google, and OpenAI. If you had to rank them — who’s performing the best?

Anthropic remains unmatched on the core agentic loop. They have the finest tool calling; their agent can maintain coherence for much longer. GPT-5 is catching up quickly. Google’s Flash family of models offers incredible price-performance. If you need something quick and economical, they are currently outperforming open source. We utilize all three, and honestly, I wouldn’t disregard the newer labs either. Reflection AI is launching open-source models we’re hearing positive feedback about. And the Chinese models are impressive — Kimi is on par with an Anthropic-generation model from January, making it only about three months behind.

When you’re competing for an enterprise deal, what gives you the upper hand?

Most of our sales come from organic or inbound leads — heavily product-driven. We’ve secured clients like Zillow and Meta solely through users adopting the product and subsequently requesting an enterprise plan. When it goes top-down and there’s a formal competition, we typically succeed because of our product. But even in instances where we might lack a specific feature, when it reaches the C-suite and the IT department, Replit excels in security. Many vibe-coding tools will create a website and link it to an external database — great solutions, but this complicates security significantly since the database is publicly accessible and requires configuring row-level security, which is especially challenging for non-technical builders. Replit, being full stack, with the database incorporated into the project and not open to the public — that enhances the app’s inherent security.

We’ve also spent a decade battling crypto fraudsters and hackers, so our cybersecurity function rivals that of a specialized cybersecurity startup. Each time you deploy an app on Replit, we generate an entirely new isolated project on Google Cloud. We adopt Google’s security framework.

Can we discuss churn? How long do you retain customers if the best prototypes ultimately get integrated into a company’s existing stack?

Churn is exceptionally low, and net retention is remarkably high — 300% in some cases. What we often hear from clients is that when engineers get anxious and attempt to transfer an app into their own stack, they frequently worsen it. Once enterprises become comfortable with the full Replit stack — especially when we establish a single-tenant environment for them — they retain their apps on Replit. For example, Bain & Company swapped out Tableau and Power BI for Replit and Databricks.

There’s rising concern about AI bloat — non-technical users create significantly more code and consume far more tokens. This benefits you [given your usage-based fees]. What about your clients?

We don’t encounter much regrettable expenditure. Enterprises are very conscious of ROI, and they inform us about the returns they are experiencing. Generally, they feel the investment is entirely justified — often yielding one, two, three orders of magnitude. If they spend $100,000 a month with Replit, they typically generate $2 million, $3 million, $10 million in returns.

Let’s discuss Apple. Another competitor, Lovable, just received approval for an app-building application from the App Store this week. Replit has been in App Store purgatory, with Apple blocking your updates for months. How detrimental is that for you?

It’s not a matter of life or death — we could lose the app, and it wouldn’t significantly impact our business. However, it’s an application that people genuinely appreciate. We’ve been on the App Store for four years. Kids in disadvantaged areas learn coding on Replit via their Android devices. Executives utilize it during meetings.

The reason Replit faced restrictions when others didn’t, in our view, is that Replit creates iOS apps. When we introduced that feature in December, charts circulated showing how many apps were being accepted into the App Store through us. We believe Apple perceives that as a threat.

Apple’s stated reason is that you download new code to the device [post-approval], which breaches their guidelines.

That’s untrue. And we can substantiate it in court if necessary.

Is that a possibility?

I hope not. I’m an admirer of Apple, and I would love to partner and create something remarkable together. We’re pleased to direct customers toward Xcode [Apple’s own development environment]. But you cannot manage a marketplace accessible to a billion users and make decisions that are discriminatory or based on whims.

Just curious if, like Nvidia, OpenAI, and others, you’re contemplating investing in your clients in exchange for equity.

We’ve given it considerable thought, and it is on our minds. I’ve personally invested in a few startups that originated on Replit before they earned any revenue. Some of these, like Magic School — a teacher decided to dedicate his time during COVID to learn a bit of vibe coding and developed an AI app for fellow educators. He identified an issue where in America, we stress out a lot of teachers. He aimed to use AI to alleviate the workload. He achieved that, generating $20 million in his first year. Other businesses that began on Replit, I believe, are now valued at half a billion dollars. The entrepreneurial spirit on Replit right now is genuinely thrilling. We integrated with Stripe a few months ago, and the transactions flowing through Replit are seeing triple-digit growth month over month. Before long, our customers might be generating more revenue than we do.

You can watch our entire discussion with Masad below:

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