AI coding assistants are becoming extremely popular, with the majority of respondents in GitHub's latest poll saying they have adopted AI tools in some way. Jared Friedman, partner at Y Combinator, recently claimed that a quarter of YC's W25 startup batches have 95% of the codebase generated by AI.
Feeling the opportunity, VCS is in a hurry to back up and build startups developing AI-powered support programming tools. One of these startups, Graphite, raised $52 million in the Series B round led by Accel on Tuesday, and announced its participation from the Humanity Anthology Fund with Menlo Ventures, Shopify Ventures, Figma Ventures, Andreessen Horowitz and General Partnership.
Tomas Reimers, Greg Foster and Merrill Lutsky founded Graphite in 2020. Reimers is a former Flack software developer, while Foster was an engineer at Airbnb and Google. Lutsky previously founded Posmetrics, a customer feedback solution company.
Graphite began his life as a mobile development tool company, but pivoted to code reviews right after opening the shop. Today, Graphite's platform provides code feedback and leverages AI (specifically the human model and Openai model) to flag errors and potential monitoring.
“Graphite started out as an internal tool I built to solve my own pain around code reviews,” Lutsky told TechCrunch. “We shared what we had built with a few former meta-engineers. He quickly shared it more widely. Soon the demand for graphite was so big that it couldn't be ignored.”
Graphite also suggests changes to the code from developer comments about the codebase, summarizing the code and generating possible fixes for code failures. In the next act of startups, graphite spins diamond, an AI tool designed to automatically catch coding bugs and errors as a standalone product.
Graphite's DiamondDimage Credit: Graphite
There is a lot of competition in the AI coding assistant space. Beyond Github's co-pilot, well-funded efforts such as cursor makers Anysphere, Poolside, Augment, Magic, Codeium, Startups Coderabbit, and Deepcode have focused specifically on AI-powered code review applications. Openai recently updated its MacOS ChatGPT app to edit the code directly with popular app development tools, and Anthropic (one of Graphite's financial aids) has its own support programming tool.
Graphite was able to carve out its own niche by working to alleviate the customer's fear of the reliability risks associated with AI-powered aid coding tools. Unlike some tools in the market, Graphite allows customers to define patterns specific to their codebase and set up filters for sensitive information that can undermine the security of their codebase.
“Revenues increased 20 times in 2024, serving tens of thousands of engineers from over 500 companies, including Shopify, Snowflake, Figma and Prperxity,” says Lutsky. “Coupled with revenue growth, this new funding will provide years of runways, a clear path to profitability, and resources to actively invest in growth and AI.”
To make the platform even more attractive, Graphite has provided free core code reviews to teams of all sizes. Previously, only groups of 10 or fewer people could use the company's tools for free.
With the latest funding, Graphite has raised approximately $81 million in venture capital to date. The 30 startup says the latest tranche will be directed towards product development and growth of NYC-based teams.