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

Amjad Masad, the founder of Replit, has witnessed a remarkable evolution in his company over the past decade, particularly in the last year and a half. The AI-powered coding platform has surged from a modest $2.8 million in revenue for 2024 to an impressive trajectory that Masad estimates could reach a billion-dollar annual run rate. At a recent TechCrunch event in San Francisco, Masad addressed a pressing question within the tech community: with rival company Cursor reportedly negotiating a $60 billion acquisition by SpaceX, is Replit also considering a sale? While he acknowledged the challenges faced by smaller, independent AI firms, Masad emphasized that Replit has managed to maintain a positive gross margin for over a year, a feat Cursor has struggled with, reportedly operating at a negative 23% gross margin. Masad highlighted that Replit's business strategy targets a different customer base, allowing for a more sustainable operational model. The platform offers an all-inclusive solution for users, particularly those with little to no coding experience, enabling them to create and deploy applications effortlessly. This comprehensive approach includes features such as security and database management, which have been integrated into the platform over time. Regarding the potential for a sale, Masad confirmed that discussions with potential acquirers do occur, but he is firmly committed to keeping Replit independent. He expressed a strong desire to continue pursuing the vision of empowering a billion software creators, a goal he first articulated in 2018 that now seems increasingly attainable. When comparing collaborations with major AI players like Anthropic, Google, and OpenAI, Masad praised Anthropic for its superior tool functionality and coherence, while also acknowledging the competitive pricing of Google’s models. He pointed out that Replit utilizes all three companies’ technologies and remains open to innovations from emerging labs. On the topic of customer retention, Masad reported exceptionally low churn rates and net retention figures soaring as high as 300%. He explained that once enterprises integrate Replit into their operations, they often find it difficult to revert to traditional methods, citing examples of companies that have replaced established tools with Replit’s platform. Masad also addressed the ongoing challenges with Apple’s App Store, where Replit has faced delays and restrictions. He expressed his frustration with Apple, suggesting that their stated reasons for blocking updates are misleading. While he hopes to resolve these issues amicably, he is prepared to take legal action if necessary. Lastly, Masad discussed the potential for Replit to invest in its customers, noting that some startups birthed from Replit have already achieved significant success. He shared an inspiring story of a teacher who developed an AI app to alleviate educator burnout, highlighting the entrepreneurial spirit thriving within the Replit community. As the integration with Stripe continues to grow, Masad anticipates that some customers will soon surpass Replit in revenue generation, marking a new chapter in the company’s journey.