While AI coding startups like Cursor close brow-raising rounds on barely three years of existence, Replit’s path to a $3 billion valuation has been anything but swift. For CEO Amjad Masad, who’s been building tools to democratize programming since 2009, it’s a story of muscling through multiple failed business models, years stuck at the same revenue plateau, and a reckoning last year that forced him to cut half his staff.
That makes what happened next more remarkable. Earlier this month, the Bay Area-based company closed a $250 million funding round led by Prysm Capital, nearly tripling its valuation from 2023. The raise came on the heels of never-before-seen revenue growth for the company — from just $2.8 million last year to $150 million in annualized revenue in less than a year. But for Masad, this moment represents something more than finally realizing financial traction. It’s the culmination of a 16-year obsession.
“Our mission has always been the same,” Masad told me on the newest episode of TechCrunch’s StrictlyVC Download podcast. “Initially, we said we want to make programming more accessible, and then we sort of upped the ante a little bit. We said we’re going to create a billion programmers.”
It’s purposely audacious – what a headline! – but it’s also something that Masad, a Palestinian-Jordanian, has been working toward for his entire career. As he tells it, he came to the United States in 2012 after his open-source coding project began gaining attention – including catching the eye of the New York Times. But he’d been making programming more accessible since building his first online coding experience back in 2009, with his work as an early engineer at the startup Codecademy kicking off what became the massively online open courses (MOOC) revolution. (His code also powered the in-browser tutorials of Udacity, a Codecademy rival that launched in 2012, one year after Codecademy was founded.)
Still, turning that vision into a viable business of his own proved a lot harder than he anticipated. Replit was founded in 2016, and for eight long years, the company struggled to find product-market fit. “We had reached that $2.83 million [in annual recurring revenue] back in ’21, maybe,” Masad recalled. “And so this is how painful it’s been. We’ve been hovering around the same revenue for like four or five years.”
The company tried selling to schools (“incredibly difficult,” Masad noted), cycling through different business models, and watched each one stabilize around the same modest revenue level.
Along the way, Replit built sophisticated infrastructure for cloud development environments and “multiplayer coding,” collaborative editing akin to Google Docs but for programming. But the technical achievement wasn’t translating into revenue growth, and by last year, with the company at 130 employees and burning through cash, Masad said he had to make a painful decision. “I looked at our burn, and I looked at our progress on our revenue chart, and it just didn’t make any sense. The business wasn’t viable.” Replit cut its headcount by 50%, bringing it down to around 60 to 70 people at its lowest point.
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Then came the breakthrough.
Last fall, Replit launched Replit Agent, which Masad calls “the first agent-based coding experience in the world” that can’t just write code but “debug it, deploy, provision the database for you, just act as a true software engineering partner.”
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