Replit’s Amjad Masad on the Cursor deal, fighting Apple, and why he’d rather not sell

Amjad Masad has been building Replit for ten years, but the past eighteen months have been something completely different. The AI ​​coding assistant company went from $2.8 million in revenue in all of 2024 to what Masad describes as an annual run rate of $1 billion.

At TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday evening, we covered a lot of ground in a short time, starting with the question everyone in the industry is now asking: In a world where rival Cursor is reportedly in talks to be acquired by SpaceX for $60 billion, is Replit also required to sell? We also touched on Replit’s net revenue retention – a measure of how much existing customers are expanding their spend – which Masad says is as high as 300%. His willingness to take Apple to court over what he bluntly called lies in the App Store battle with Replit, and the possibility of the company investing in its own customers.

On the issue of independence, Masad was unequivocal. Unlike Cursor, which he said was operating at a negative 23% gross margin, he argued that Replit has the economics to make that path feasible — even if he doesn’t completely rule out a sale.

The following has been edited for length and clarity:

TC: Cursor’s reported SpaceX deal was the talk of the town last week. What did you make of it?

AM: It’s kind of hard to be an independent, smaller AI company building on basic models, especially when you’re burning a ton of money. Some of the reporting suggested that Cursor has a negative margin of 23%, and if you also want to invest in training models, that makes it incredibly difficult to remain independent.

For us at Replit, partly because we’re targeting a different customer group, we’ve been able to run the business more rationally. We have been positive for gross margin for more than a year. We are slightly more expensive, but offer much more. Our audience is mostly non-technical users who previously couldn’t create software. We provide an end-to-end platform – from the prompt to a deployed application that can scale. We take care of security, databases and database migration. And we’ve been doing this so long that we’ve built a lot of those primitives into the platform.

Is Replit for sale? I assume you talk to potential buyers all the time; it is your fiduciary responsibility.

Yes. We have great partners, and they bring up these topics sometimes. But we’re going to try to stay independent. I would like us to remain an independent company. We’ve been around for 10 years, before it was even accepted that you could create apps based on ideas alone. We talked about creating a billion software makers at YC in 2018, and people sometimes even laughed at that dream. Now that dream is possible, and we kicked off this revolution in September 2024 with our agentic coding experience. 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 is still undefeated on the nuclear agent loop. They have the best tool calling; the agent can remain coherent for much longer. GPT-5 is catching up quickly. Google’s Flash model family is simply great in terms of price-performance ratio. If you want something fast and cheap, they currently beat open source. We use all three, and honestly, I wouldn’t leave out the newer labs either. Reflection AI is coming out with open source models that we’re hearing great things about. And the Chinese models are impressive: Kimi is as good as a January Anthropic-generation model, so it’s only about three months behind.

If you’re in a pinch for a business deal, what will make you the profit?

The majority of our sales are inbound or organic, very product-oriented. We’ve acquired customers like Zillow and Meta purely because people adopted the product and then raised their hands to purchase a business plan. If it’s top-down and there’s a formal bake-off, we usually win on product. But even in cases where we miss a feature, Replit wins on security once it reaches the C-suite and the IT group. Many vibe coding tools generate a website and connect it to an external database – great products, but it makes security much more difficult, because the database is open to the public and you have to configure row-level security, which is especially difficult for non-technical builders. Replit is full-stack, with the database built into the project and not accessible to the public – making the app inherently more secure.

We’ve also spent a decade fighting crypto scammers and hackers, so our cybersecurity function is as good as a dedicated cybersecurity startup. Every time you deploy an app to Replit, we create a brand new isolated project on Google Cloud. We adopt Google’s security model.

Can we talk about churn? How long do you retain customers if the best prototypes end up being rebuilt into a company’s existing stack?

Turnover is very low and net retention is incredibly high: in some cases 300%. What we actually hear from customers is that when engineers get nervous and try to rebuild an app on their own stack, they often make things worse. Once companies get comfortable with the full Replit stack – especially if we set up a single-tenant environment for them – they’ll keep the apps on Replit. For example, Bain & Company has replaced Tableau and Power BI with Replit and Databricks.

There is a growing concern about the bloat of AI: non-technical users are generating a lot more code and burning a lot more tokens. That’s good for you [given your usage-based fees]. What about your customers?

We don’t have a lot of regrettable expenses. Companies are very ROI conscious and tell us about the returns they achieve. For the most part, they believe the investment is absolutely worth it – often by one, two, three orders of magnitude. If they spend $100,000 a month on Replit, they typically generate $2 million, $3 million, $10 million in returns.

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

It’s not a matter of life or death: we could lose the app and it wouldn’t mean anything meaningful to our business. But it’s an app that people really love. We’ve been on the App Store for four years. Children in underprivileged communities learn to code on Replit on their Android devices. Managers use it during meetings.

We believe the reason Replit was blocked while others were not is because Replit makes iOS apps. When we launched that capability in December, graphs circulated showing how many apps were getting into the App Store through us. We think Apple feels threatened by this.

The reason given by Apple is that you are downloading new code to the device [after the approval process]which is against their guidelines.

That’s a lie. And if we have to, we can prove it in court.

Is that going to happen?

I hope not. I’m a fan of Apple and I’d love to collaborate and build something great together. We love sending customers to Xcode [Apple’s own development environment]. But you can’t run a marketplace that a billion people have access to and make decisions that are discriminatory or based on whim.

I wonder if you, like Nvidia, OpenAI and others, are considering investing in your own customers in exchange for equity.

We’ve thought about it a lot and it’s a consideration. I’ve personally invested in a few startups that started with Replit before they made any money. Some of them, like Magic School – a teacher decided to take the time during COVID to learn a little mood coding and built an AI app for other teachers. He discovered the problem that we are burning out a lot of teachers in America. He wanted to use AI to reduce workload. He did that and made $20 million in the first year. Other companies that started with Replit are valued at half a billion dollars, I think. The entrepreneurship happening on Replit right now is really exciting. We integrated with Stripe a few months ago and the transactions flowing through Replit are growing at triple digits month over month. Soon our customers will generate more revenue than we do.

You can watch our full conversation with Masad below: