Former GitLab CEO raises money for Kilo to compete in crowded AI coding market

In an ambitious move to carve out a niche in the competitive AI coding arena, Kilo Code has successfully raised $8 million in seed funding. This new startup, co-founded by former GitLab CEO Sid Sijbrandij, is drawing significant interest from investors who believe there’s still room for innovation in how software engineers write code. The funding round saw contributions from several prominent investors, including Breakers, Cota Capital, General Catalyst, Quiet Capital, and Tokyo Black. Sijbrandij, a self-taught developer who played a key role in advancing GitLab's collaborative coding tools, stepped down as CEO last year to focus on his health but remains actively engaged as board chair. With the tech industry increasingly fascinated by the capabilities of large language models in software development—often referred to as vibe coding—Sijbrandij has been closely observing these trends. The term 'vibe coding' was popularized by OpenAI co-founder Andrej Karpathy earlier this year, as companies like Microsoft report that it constitutes 30% of their code. Kilo Code’s software integrates seamlessly with popular coding platforms like Cursor and Microsoft’s Visual Studio Code, providing developers access to a range of AI models, including the Grok Code Fast 1 from Elon Musk’s xAI. Remarkably, Kilo Code has processed over 3 trillion tokens in just the past month, showcasing its rapid adoption. Daniël Langezaal, a software engineer at Dutch e-commerce firm Plug&Pay, has been using Kilo Code for several months and appreciates its flexibility in supporting both premium and budget-friendly models. He noted that about 80% of his team now utilizes Kilo Code, which has significantly reduced the time needed for complex tasks, such as constructing intricate SQL queries. As Kilo Code continues to gain traction, GitLab has shown interest in its developments, reportedly discussing Kilo’s offerings at the board level. GitLab recently filed a document mentioning Kilo, indicating a potential partnership or acquisition interest, having paid Kilo $1,000 for a right of first refusal on any acquisition proposal until August 2026. With competitors like Figma entering the vibe coding space, Kilo Code is not just aiming at seasoned developers but also plans to cater to newcomers. Sijbrandij hinted at future developments, including an app builder designed to simplify coding for users, inspired by the success of startups like Lovable and Bolt. The race in the AI coding market is heating up, and Kilo Code is poised to make a significant impact.