Replit’s Amjad Masad on Cursor deal, fights Apple, and why he’s not selling

Amjad Masad has been building Replit for 10 years, but the past 18 months have been something else entirely. The AI ​​coding assistant company has grown from $2.8 million in overall revenue in 2024 to what Masad describes as tracking a $1 billion annual run rate.

At TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday night, we covered a lot in a short amount of time, starting with the questions everyone in the industry is asking right now. In a world where rival Cursor is reportedly set to be acquired by SpaceX for $60 billion, will Replit also sell? We also looked at Replit’s net revenue retention rate, a measure of how much existing customers expand their spending. Masad said this rate is reaching up to 300%. His willingness to take Apple to court over things he says could hinge on the App Store war with Replit and the potential for the company to start investing in its own customers.

On the issue of independence, Massad was clear. He argued that unlike Cursor, which is operating with minus-23% gross margins, Replit has the economics to make that route viable, even if it doesn’t completely rule out a sale.

The following has been edited for length and clarity.

TC: The SpaceX deal reported by Cursor was a hot topic in the industry last week. How did you make it?

AM: It’s somewhat difficult to be a small, independent AI company based on a foundational model, especially if you’re burning a ton of cash. Some of the reporting suggested that Cursor’s margins were minus 23%, making it incredibly difficult to maintain independence if it wanted to invest in its education model as well.

For Replit, the business has been able to run more rationally, in part because it targets a diverse customer base. We have maintained positive gross margin for over a year. We cost a little more but offer much more. Our audience tends to be mostly non-technical users who haven’t been able to create any software before. We provide an end-to-end platform from prompt to scalable deployed application. We handle security, database, and database migration. And we’ve been doing this long enough that we’ve built a lot of these building blocks into the platform.

Are leaflets sold? I assume you are always talking to potential acquirers. It is your fiduciary responsibility.

huh. We have great partners, and they bring up these topics from time to time. But we will try to maintain our independence. I want us to remain an independent company. It took 10 years for it to be accepted that we could create an app from just an idea. We were talking about creating a billion software creators at YC in 2018, and people sometimes actually laughed at that dream. Now that dream is possible. We started this revolution with our agent coding experience in September 2024. I feel like we can go much further.

We work closely with Anthropic, Google, and OpenAI. If you had to rank them, who is doing best?

Anthropic remains undefeated in its core agent loop. They have the best tool calls. Agents can remain consistent for much longer. GPT-5 is catching up quickly. Google’s Flash family of models offers really good value for money. If you want something fast and cheap, it’s actually beating open source. We use all three and honestly don’t discount the newer lab either. Reflection AI is launching with an open source model, which we’re hearing good things about. And the Chinese model is also impressive. Kimi has been as good as the Human Generation model since January, falling behind by about 3 months.

What works in your favor when making the final decision for a corporate transaction?

The majority of our sales are inbound or organic and product-focused. We’ve acquired customers like Zillow and Meta purely through people adopting the product and then raising their hands and buying the enterprise plan. When it’s top-down and there’s a formal bake-off, we usually win the product. But even with missing features, Replit wins on the security front once it reaches the C-suite and IT groups. Many Vibe coding tools create websites and connect them to external databases. It’s a great product, but security becomes much more difficult because the database is public and you have to configure row-level security. This is especially difficult for non-technical builders. Replit is full stack, with the database built into the project and not exposed to the public, making the app inherently more secure.

We’ve also spent a decade fighting cryptocurrency fraudsters and hackers, so our cybersecurity capabilities are as good as any dedicated cybersecurity startup. Each time you deploy an app to Replit, a completely new, isolated project is created in Google Cloud. We inherit Google’s security model.

Shall we talk about churn? How long can you retain customers if your best prototype ends up being rebuilt into your company’s existing stack?

Churn rates are very low and net retention rates are incredibly high (300% in some cases). What we actually hear from our customers is that when engineers get anxious and try to rebuild apps on their own stack, things often get worse. Once a company becomes comfortable with the entire Replit stack (especially when setting up a single-tenant environment), they keep their apps in Replit. For example, Bain & Company replaced Tableau and Power BI with Replit and Databricks.

There are growing concerns about AI expansion. Non-technical users generate much more code and consume much more tokens. This is good for you (considering usage-based pricing). What about customers?

We don’t have many expenses we regret. Businesses take ROI very seriously and it tells them how much profit they are making. In most cases, they think the investment is worth it (often by a factor of 1, 2, or 3). If you spend $100,000 a month on Replit, you’ll typically generate $2 million, $3 million, $10 million in some kind of revenue.

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

It’s not a matter of life and death. We could lose the app and it might mean nothing to our business. But it’s an app that people really like. We’ve been on the App Store for four years. Underprivileged children learn how to code with Replit on Android devices. Executives use it in meetings.

I think the reason Replit was blocked while others weren’t is because Replit makes an iOS app. When we launched this feature in December, we had a chart showing how many apps entered the App Store through us. We think Apple feels threatened by that.

The reason Apple states is that you are downloading new code to your device (after the approval process) and this violates their guidelines.

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

Will that happen?

I hope not. I’m a fan of Apple. We want to work together to create something great. We’re excited to introduce our customers to Xcode, Apple’s own development environment. But you can’t make discriminatory or capricious decisions when you’re running a marketplace that’s accessible to billions of people.

I wonder if they are considering investing in their customers in return for equity, like Nvidia, OpenAI, and others have done.

We’ve thought about it a lot and it’s a consideration. I’ve personally invested in several startups from Replit before making any money. Some teachers, like Magic School, decided to take time during COVID-19 to learn Vibe coding and build AI apps for other teachers. He discovered that the problem in America was that many teachers were burnt out. He wanted to use AI to reduce his workload. He did so, and made $20 million in his first year. I think the other companies that Replit started are valued at $500 million. The entrepreneurship happening at Replit right now is really exciting. We integrated with Stripe a few months ago and the transactions flowing through Replit are growing by triple digits every month. Soon our customers will be generating more revenue than us.

You can watch our full conversation with Masad below.