It's no secret that using AI-powered coding tools to build apps and websites via natural language prompts – is exploding in popularity.
In July, the Swedish vibe coding startup hit $100 million in annual recurring revenue (ARR) just eight months after its launch. It plans to close the year at $250 million, and expects it to reach $1 billion within the next 12 months. Meanwhile, Replit said earlier this month that the ARR had skyrocketed from $2.8 million to $150 million in less than a year.
The prominent growth of these companies has driven a wave of competitors, many of which are quickly gaining momentum. “This is one of the spaces where every company is growing like weed,” said Nikhil Basu Trivedi, co-founder and general partner of VC Firm Footwork.
However, despite their rapid growth, the adorable, replicated, and other vibes startups have major drawbacks, Basu Trivedi argues.
The problem with most atmosphere coding companies is that non-technical users don't provide all the infrastructure they need to launch feature products.
An AI app launched a month ago is trying to solve this problem by providing all the tools that users need to run their business on the web and send vibe coded creations to the app store. The company's initial traction was explosive, reaching an annual run rate of $2 million in just two weeks.
The atmosphere code market is busy, but the company's growth rate is so impressive that Basu Trivedi knew he had to fund it.
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On Monday, anything that received additional support from UNCORK, Bessemer and M13 was announced, which raised a $11 million funding round at a $100 million valuation led by Footwork.
The co-founded by former Google colleagues Dhruv Amin and Marcus Lowe is specifically designed to help technical people generate full web and mobile applications.
“I've never actually seen a real business built on top of these tools,” Amin said of the companies that code other vibes. “We want to be Shopify in the space where people build apps that make money on us.”
Amin claims that users are already leveraging something to build fully functional applications available on the AppStore, such as Habit Tracker, CPR training courses, and the “Try-On” app for hairstyles. Some of these apps are beginning to make money.
According to Amin, these users don't have to figure out how to connect other important tools to the prototypes generated by the vibe coding app, so the majority can complete the app.
The idea of developing a soup-to-nut AI-assisted app builder came to Amin and Wow a year ago. The duo have been working together since 2021. Their first product was the bootstrap development market, which used AI coding tools in conjunction with human developers. However, this was before the rise of LLMS. The business generated around $2 million in annual utilization, but it has become clear that generative AI can deliver apps quickly faster than the market model, at a lower cost.
So in 2023, they closed the business and began working on developing an AI-powered app building tool. They raised several seeds and seeds funding from UNCORK and Bessemer Venture Partners along the way.
Amin and Lowe have noticed that most competitive tools, including Lovable and Stackblitz bolts, rely on third-party database Supabase. They believed that building all the infrastructure in-house would differentiate AI.
It took time to develop, but it may prove to be worth the effort as everything is not the only startup in this market. That's not the only thing we bet that providing all the backend tools could be a huge growth driver. Other startups building large chunks of their own infrastructure include Mocha and Rork.
However, fierce competition does not bother Basu Trivedi. “It appears there's plenty of demand for different types of app-building products,” he said.