Replit’s Amjad Massad talks about the Cursor deal, the battle with Apple, and why he doesn’t want to sell

Amjadmasad has been building Replit for 10 years, but the past 18 months have been something entirely different. The AI ​​coding assistant company generated $2.8 million in revenue for all of 2024 and grew toward what Massad calls an annual operating rate of $1 billion.

TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday night covered a lot in a short space 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 inevitable that Replit will also be sold? He also touched on Replit’s net revenue retention rate, a measure of how much existing customers are increasing their spending. Massad said that number could be as high as 300%, that Apple is willing to take Apple to court over its apparent claims in the dispute with the App Store and Replit, and that the company may start investing in its own customers.

On the issue of independence, Massad was clear. He argued that unlike Cursor, which is operating on a negative 23% gross margin, Replit has the economics to make that path viable, even if it doesn’t completely preclude a sale.

The following has been edited for length and clarity.

TC: The SpaceX deal reported by Mr. Cursor was the talk of the industry last week. What did you think?

AM: It’s a little difficult for small, independent AI companies to build foundational models, especially when they’re spending a lot of cash. Some reports suggest that Cursor’s margins are -23%, making it very difficult to maintain independence if you also want to invest in training the model.

At Replit, we were able to operate our business more rationally because our target customer groups were different. We have had positive gross margins for over a year. It’s a little pricey, but it offers so much more. Our audience tends to be mostly non-technical users who have never written software before. We provide an end-to-end platform from prompts to extensible deployed applications. Responsible for security, database, and database migration. And we’ve been doing this long enough that we’ve built a lot of primitives into the platform.

Is reprit for sale? I’m sure you’re constantly talking to potential acquirers. It’s your fiduciary responsibility.

Yeah. We have great partners and they bring up topics like this from time to time. However, we will strive to maintain our independence. We want to remain an independent company. We’ve been around for 10 years, before it was accepted that you could create an app with just an idea. When we talked about creating a billion software creators at YC in 2018, people actually laughed at that dream. That dream became a reality and we started this revolution in September 2024 with our agent coding experience. I feel like I can make further progress.

You work closely with Anthropic, Google, and OpenAI. If you had to rank them, who would do it best?

Anthropic is still undefeated in the core agent loop. They have the best tools. Agents can remain consistent for longer. GPT-5 is quickly catching up. Google’s Flash family of models is 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 to be honest, we wouldn’t discount the new lab either. Reflection AI is coming out with an open source model and we’re hearing great things about it. And the Chinese model is impressive – Kimi has been as good as the Anthropic generation model since January, so it’s only about three months behind.

If you’re participating in an Enterprise Deals Bake Off, what wins?

Most of our sales are inbound or organic and we are very product driven. We’ve acquired customers like Zillow and Meta purely through people adopting the product and raising their hands to buy the enterprise plan. When there is a formal bake-off from the top down, the product usually wins. But when it gets to executives and IT groups, Replit wins when it comes to security, even though it may be missing features. Many vibecoding tools generate a website and connect it to an external database. It’s a great product, but it makes security very difficult because the database is publicly available and you have to configure row-level security. This is especially difficult for non-technical builders. Replit is full-stack, and the database is built into the project and not exposed to the public. This inherently makes the app more secure.

And because we’ve spent a decade fighting cryptocurrency scammers and hackers, our cybersecurity capabilities are as strong as any cybersecurity startup. Every time you deploy an app to Replit, a completely new, isolated project is created on Google Cloud. Inherited from Google’s security model.

Can we talk about churn? If the best prototype is eventually rebuilt into the company’s existing stack, how long can the customer retain it?

Churn is extremely low and net retention is incredibly high, in some cases 300%. What we’ve actually heard from our customers is that when engineers get nervous and try to rebuild the app onto their own stack, things often get worse. Once companies get used to the full Replit stack, they will keep their apps on Replit, especially if they have set up a single-tenant environment. For example, Bain & Company replaced Tableau and Power BI with Replit and Databricks.

There are growing concerns about AI bloat. Non-technical users generate far more codes and spend far more tokens. That’s good for you (given the usage-based fees). What about customers?

There aren’t many unfortunate expenses. Companies are very conscious of ROI and tell us about the benefits they are getting. Most of the time, the investment feels completely worth it, often by one, two, or even triple orders of magnitude. If they spend $100,000 a month on Replit, they’re generating some sort of profit, typically $2 million, $3 million, $10 million.

Let’s talk about Apple. Another competitor, Lovable, just received approval from the App Store this week for its app-building app. Replit ended up in App Store purgatory, with Apple blocking updates for months. How much does it hurt you?

It’s not life or death. We could lose the app and that would mean nothing to our business. But it’s an app that people really love. We’ve been using the App Store for four years. Children from underprivileged communities learn to code with Replit on Android devices. Managers use it in meetings.

We believe the reason why Replit was blocked while others were not is because Replit is creating an iOS app. When we released that feature in December, there was a chart floating around showing how many apps were coming into the App Store through us. I think Apple feels threatened by that.

The reason Apple stated is that it is downloading new code to the device (after an approval process), which violates its guidelines.

That’s a lie. And you can prove it in court if necessary.

Will that happen?

I hope that doesn’t happen. I’m a fan of Apple and would love to collaborate with them and create something great together. We happily send our customers to Xcode (Apple’s proprietary development environment). But you can’t run a marketplace that has access to a billion people and make decisions based on discrimination or whims.

Wondering if you’re thinking of investing in your own customers in exchange for equity, like Nvidia or OpenAI?

We’ve thought about it a lot and it’s a consideration. I have personally invested in several startups that started with Replit before they were profitable. Some of them are like magic schools. One teacher decided to take time to learn a little bit of vibe coding during coronavirus and built an AI app for other teachers. He discovered a problem in America: many teachers are burnt out. We wanted to use AI to reduce the workload. He did it and made $20 million in the first year. I think the other company that started Replit was 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 continue to grow by triple digits month over month. Soon, you’ll be making more money than we are.