Replit’s Amjad Massad talks about the Cursor deal, fighting Apple, and why he’d rather not sell

Amjad Massad has been building Replit for a decade, but the past 18 months have been something entirely different. The AI ​​coding assistant company’s revenue has risen from $2.8 million in all of 2024 to tracking what Massad describes as a $1 billion annual run rate.

At TechCrunch’s StrictlyVC event in San Francisco on Thursday night, we covered a lot of ground in a short time, starting with the question everyone in the industry is asking right now: In a world where rival Cursor is said to be in talks to be acquired by SpaceX for $60 billion, is Replit also obligated to sell? We also hit Replit’s net revenue retention — a measure of how much existing customers have increased their spending — which Massad says is as high as 300%, and his willingness to file a lawsuit against Apple over what he called lies entirely in the App Store’s battle with Replit, and the potential for the company to start investing in its customers.

On the issue of independence, Massad’s position was clear. Unlike Cursor, which he said was operating on negative gross margins of 23%, he said Replet had the economics to make that path viable — even if it stopped short of ruling out a sale altogether.

The following has been edited for length and clarity:

TC: The SpaceX deal announced by Cursor was the talk of the industry last week. What did you make of it?

AM: It’s kind of difficult to be a smaller independent AI company based on basic models, especially if you’re burning a lot of money. Part of the reports state that Cursor has negative margins of 23%, and if you also want to invest in training models, this makes it very difficult to remain independent.

For us at Replit, partly because we target a different set of customers, we have been able to run the business more rationally. Gross margin has been positive for more than a year. We’re a little more expensive, but we offer a lot. Our audience tends to be mostly non-technical users who have not previously been able to create any software. We offer an end-to-end platform – from a claim to a published application that can scale. We deal with security, databases and database migration. And we’ve been doing this long enough that we’ve built a lot of those primitives into the platform.

Is Ripplet for sale? I assume you talk to potential acquirers all the time; It is your fiduciary responsibility.

Yes. We have great partners, and they sometimes bring up these topics. But we will try to remain independent. I would love for us to remain an independent company. We’ve been around for 10 years, even before it was accepted that apps could be created just from ideas. We were talking about creating a billion creators in 2018 at YC, and people would sometimes laugh at that dream. Now that dream is possible, and we’ve started this revolution with our proxy programming experiment in September 2024. It feels like we can go much further.

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

Anthropic remains undefeated in the basic agentic episode. They have the best tool for communication; The agent can hold on longer. GPT-5 is quickly catching up. Google’s Flash model family is amazing in terms of performance and price. If you want something fast and cheap, they’re actually beating open source now. We use all three, and frankly I wouldn’t rule out the newer ones either. Reflection AI comes with open source models that we hear great things about. And the Chinese models are impressive – the Kimi is as good as the Anthropi-generation model as of January, so it’s only about three months behind.

When you’re preparing for a corporate deal, what’s in it for you?

Most of our sales are inbound or organic, and are largely product based. We’ve gained customers like Zillow and Meta just by people adopting the product and then raising their hand to purchase an enterprise plan. When it’s top to bottom and there’s formal baking, we usually win with the product. But even in cases where we might miss a feature, once it gets to executives and the IT group, Replit wins in terms of security. A lot of dynamic coding tools will create a website and link it to an external database – great products, but they make security more difficult, because the database is open to the public and you need to configure security at the row level, which is especially difficult for non-technical creators. Replit is full stack, with the database built into the project and not open to the public – making the application inherently more secure.

We’ve also spent 10 years fighting scammers and hackers in the cryptocurrency space, so our cybersecurity function is as good as a dedicated cybersecurity startup. Every time you publish an application to Replit, we create a completely new isolated project on Google Cloud. We inherit Google’s security model.

Can we talk about volatility? How long will you hold on to customers if the best prototypes are eventually rebuilt into the company’s current batch?

The evasion rate is very, very low, and net retention is incredibly high – 300% in some cases. What we actually hear from customers is that when engineers get stressed out and try to rebuild an application in their own stack, they often make it worse. Once organizations get comfortable with the full Replit stack – especially when we set up a single-tenant environment for them – they keep the applications on Replit. For example, Bain & Company replaced Tableau and Power BI with Replit and Databricks.

There is growing concern about AI inflation, as non-technical users create more code and burn more tokens. This is good for you [given your usage-based fees]. What about your clients?

We don’t have a lot of unfortunate spending. Companies are well aware of their return on investment, and they tell us the returns they get. For the most part, they feel the investment is completely worth it – often one, two or three orders of magnitude. If they spend $100,000 a month with Replit, they typically generate $2 million, $3 million, or $10 million in revenue of some kind.

Let’s talk about Apple. Another competitor, Lovable, just got its app builder approved by the App Store this week. Replit has been in App Store purgatory, with Apple blocking your updates for months. How much does that hurt?

It’s not life or death, we could lose the app and it won’t do anything meaningful for our business. But it’s an app that people really love. We’ve been in the App Store for four years. Children in underserved communities learn programming on Replit on their Android devices. Executives use it in meetings.

We think the reason why Replit was banned while others were not is because Replit creates iOS apps. When we launched this capability in December, there were charts showing how many apps entered 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 guidelines.

This is a lie. We can prove this in court if we have to.

Will that happen?

I hope not. I’m an Apple fan, and I want to collaborate and build something great together. We are happy to send customers to Xcode [Apple’s own development environment]. But you can’t manage a market that a billion people have access to and make discriminatory or whimsical decisions.

Just wondering if you, like Nvidia, OpenAI and others, would consider investing in your customers in exchange for equity.

We’ve thought a lot about it, that’s the consideration. I’ve personally invested in a few startups that started on Replit before they made any money. Some of them, like Magic School – one teacher decided to take his time during the coronavirus crisis to learn a bit of vital programming and created an AI app for other teachers. He found this problem that in America we burn too many teachers. He wanted to use artificial intelligence to reduce the workload. He did, earning $20 million in the first year. I think other companies that started on Replit are valued at half a billion dollars. The entrepreneurship happening on Replit right now is really exciting. We integrated with Stripe a few months ago, and transactions flowing through Replit are increasing by triple digits month over month. Very soon, our customers will be generating more revenue than we have.

You can watch our full conversation with Massad below: