Replit, the AI-powered coding platform, has secured $250 million in new funding led by Prysm Capital, nearly tripling its valuation to $3 billion and marking a dramatic turnaround for the startup after years of stalled growth.
The Bay Area company, founded in 2016 by Amjad Masad, struggled for nearly a decade to find product-market fit, plateauing at around $2.8 million in annual recurring revenue and cycling through failed business models. Last year, Replit cut its workforce in half as it faced mounting pressure to become sustainable.
The breakthrough came with the launch of Replit Agent, an AI coding assistant capable of writing, debugging, and deploying code as a “true software engineering partner.” The tool has helped drive revenue from $2.8 million to more than $150 million annualized in less than a year, according to Masad.
Replit has since shifted its focus from professional developers, a crowded market dominated by GitHub Copilot, Cursor, and foundation model companies like OpenAI and Anthropic, to non-technical users and enterprises. Customers including Zillow, Duolingo, and Coinbase now pay per seat plus usage fees, a model Masad says delivers gross margins as high as 80–90%.
Despite recent successes, Replit faces challenges from AI labs launching their own coding tools and risks around safety, highlighted earlier this year when its AI agent accidentally deleted a venture capitalist’s database. The company quickly responded with new safety systems, a move Masad says strengthened its technology moat.
Armed with a $350 million war chest and a mission to “create a billion programmers,” Replit plans to scale operations, expand product development, and pursue acquisitions.
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“Our mission has always been the same,” Masad said. “We want to make programming more accessible, to create a billion programmers. That’s the market we’re building for.”
