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Business Insider
18-05-2025
- Business
- Business Insider
Silicon Valley's hottest coding startup nearly died
In 2017, Eric Simons founded StackBlitz with his childhood friend Albert Pai. Six years later, it was the startup equivalent of the walking dead. StackBlitz raised funding to build software development tools, including WebContainers technology that let engineers create and manage projects in a browser, rather than on their laptops. The business didn't really take off, and by late 2023, things came to a head. StackBlitz wasn't generating much revenue. Growth was lackluster. At a board meeting that December, an ultimatum was issued: Show real progress, or you're toast. Simons and Pai pitched a plan to grow by ramping up sales efforts for existing products, while building new offerings that could be bigger. "We also acknowledged that it might be time to explore acquisition scenarios ahead of potential failure," Simons recalled. Then, one board member, Thomas Krane, got real: By the end of 2024, everyone needed finality on StackBlitz's fate. "I think I was saying what a lot of others were thinking in the room," Krane told Business Insider. "No one was happy with the trajectory," venture capitalist and StackBlitz board director Sarah Guo remembers. "We needed a new plan." When the meeting ended, Simons walked out of his "shed-turned-home office" into his backyard on a cloudy, windy Bay Area day to try to process the news. "It was a tough pill to swallow, but we agreed," he said. As 2024 began, it looked like StackBlitz was about to become one of the thousands of startups that fizzle into the abyss of venture capital history every year. Not so fast. In Silicon Valley, fortunes can turn on dime as new inventions spread like wildfire, incinerating legacy technology and feeding unlikely growth from the embers. And this is what happened to StackBlitz. Noodling with OpenAI models In early 2024, Simons, Pai, and their co-workers probably should have been meeting more with the investment bankers Krane had introduced them to — an attempt to ring what value remained from the struggling startup. Instead, like Silicon Valley founders often do, they were noodling with new technology, seeing how OpenAI models performed on coding tasks. "The code output from their models would break, and the web apps created were buggy and unreliable," Simons said. "We thought it would be years before this improved. So we dropped that side project after about two weeks." A Bolt from the blue Then, in June 2024, OpenAI rival Anthropic launched its Sonnet 3.5 AI model. This was a lot better at coding, and it became the technical foundation for an explosion in AI coding startups, such as Cursor and Lovable, and an important driver of what's now known as vibe coding. That summer, StackBlitz started working on a new product that relied on Anthropic's breakthrough to bring coding to non-technical users. On Oct. 3, StackBlitz launched this new service. It was called a play on the startup's lightning-bolt logo. It took roughly 10 employees three months to create. Bolt used StackBlitz's technological base — that WebContainers underpinning that allows engineers to work in a browser — and added a simple box on top with a flashing cursor and a question, "What do you want to build?" The service offered a tantalizingly simple proposition: Type what you want to create in plain English and Bolt's software would tap into Anthropic's Sonnet model in the background and write the code needed to create a website or a mobile app. And not just simple sites to share your wedding photos. Full applications that let users take valuable actions including logging in, subscribing, and buying things. Before this, digital products like these required professional software engineers and developers to build them using complex coding languages and tricky tools that were way beyond the capabilities of non-technical people. Simons emailed StackBlitz investors to tell them about Bolt, and asked for their help. "If you can RT/share on X, and/or share with 3 developers you know, myself and the team would be extremely appreciative!" he wrote, according to a copy of that email obtained by BI. Crying in a "shed office" The first week that came out, it generated about $1 million of annual recurring revenue, or ARR, a common way cloud software services from startups are measured financially. The next week, it added another $1 million in ARR, and then another, according to Simons. StackBlitz wasn't, in fact, going to shut down. Instead, it had a hit on its hands. "I had slept three hours a night for a week straight to get the release out with our team," Simons told BI. "After seeing it live, and people loving it — beyond anything I had ever created before — I cried, alone at my desk in my backyard shed office." A very different investor update On the first day of November, Simons wrote a very different email to his investors. The subject line read, StackBlitz October Update: $0 to $4m ARR in 30 days. The number of active Bolt customers surged from about 600 to more than 14,000 in the first few weeks, according to a copy of the email obtained by BI. ARR soared from roughly $80,000 to more than $4 million in the same period. "You can imagine after years of grinding on our amazing core technology, endlessly searching for a valuable business use case of it, just striking out over and over again, how I and the team feel looking at this graph," Simons wrote. "If you had to put it into a word or two, it'd be something like 'HELL. YES.'" When talented technologists are pushed to search harder for new ways to monetize their inventions, on a tight deadline, sometimes magic happens, according to Krane from Insight Partners. "That life-or-death pressure led to a series of rapid pivots that ultimately led to this incredible outcome," he told BI. "This company broke every model in terms of growth rate." A new pricing model There was so much customer demand for Bolt that StackBlitz raised prices after about a week. The main subscription plan went from $9 a month to $20 a month. The startup also added new pricing tiers that cost $50, $100, and $200 a month. A few weeks after this change, almost half of Bolt's paying users were on more expensive plans. Simons said StackBlitz may have stumbled upon a new pricing model for AI code-generation services. (Turns out, he did). Every time a Bolt user typed in a request, this was transformed into " tokens," which AI models use to break letters, numbers, and other characters into digestible chunks. Each token costs a certain amount to process. Bolt users were sending in so many requests they were blowing through their token limits. So StackBlitz introduced tiered pricing so customers could pay extra to get more tokens. "Customers are willing to pay a lot of money for heavier usage of AI inference," Simons told his investors. One customer was quoted $5,000 and a 2-3 month timeframe by a Ukrainian contractor to develop an app. Instead, she bought Bolt's $50 a month plan, and built the app herself in less than two weeks. "1/100th of the cost, and 5-10x faster timeline," Simons wrote. A carrot or a stick? Simons also couldn't resist an invitation to stay on the rocket ship, dropping a classic Silicon Valley funding-raise carrot. Or was it stick? "We've also received substantial inbound interest from VCs and from strategic acquirers," the CEO wrote in the Nov. 1 email to investors. "So we're starting to explore how best to play our hand(s) in the coming weeks/months here." (Earlier this year, reports emerged of a new funding round valuing StackBlitz at roughly $700 million). With StackBlitz's demise averted, Simons realigned resources to focus on Bolt. The startup hired more staff and added Supabase, a database service that stores transaction data, user registrations, and other crucial information. It also added Stripe technology so Bolt users can easily accept card and digital payments. StackBlitz also spent heavily to educate customers on how to use Bolt better, running weekly live YouTube video sessions. Waiting for Anthropic Bolt was off the races. But there was still one big hurdle involving Anthropic. Back in the spring of 2024, an Anthropic cofounder filled out a "Contact Us" form on StackBlitz's site. The form asked anyone who wanted to license the WebContainers technology to fill out some basic details. "After we saw that form, we called to chat. He said Anthropic was working on a project and this could help," Simons recalled, without identifying the cofounder. For the first year, StackBlitz proposed a license for Anthropic with uncapped usage for about $300,000. "With hindsight, we made them a smokin' deal," Simons said. "We were desperate at that point." Other big customers might follow Anthropic's lead and sign license deals, too, the thinking went. By October, though, when Bolt had taken off using the same web-based StackBlitz technology, a $300,000 uncapped license suddenly looked like a very bad deal for Simons's startup. But there was a catch: Anthropic had to sign the contract by the end of October, otherwise the deal would expire. Simons and his StackBlitz co-workers watched the clock like hawks. "We were like, god, please don't sign it," Simons told BI. The deadline finally passed. Anthropic never signed. Simons doesn't know exactly why the AI lab didn't put pen to paper. However, he noted that Anthropic has "a lot of things going on." "They were like, 'we might come back to this in the future maybe,'" Simons said. "We have a great relationship with Anthropic. They are doing an incredible amount of revenue now, and so are we." Whatever the reason, StackBlitz was now free to pursue its Bolt growth strategy. A podcast appearance By December 6, Simons appeared on No Priors, a popular AI podcast hosted by Guo and another top AI startup investor, Elad Gil. (Guo is an early backer of StackBlitz). The CEO shared that Bolt was generating $20 million in ARR, just a few months after it launched. By the middle of March 2025, Bolt's ARR had jumped to $40 million. In a recent interview with BI, Simons wouldn't share more revenue details. However, he said StackBlitz planned to announce a new ARR number when Bolt passes triple-digit ARR, meaning more than $100 million. The service has 5 million registered users now, and Simons said StackBlitz is profitable, growing, and healthy. There's even a new name for the millions of non-technical users who craft digital offerings through Bolt. Simons calls them "software composers." A hackathon meeting He explained this to me at a "hackathon" event StackBlitz held on May 7 in San Francisco. Hundreds of "composers," along with other customers, partners, and investors, partied late into the evening, with The Chainsmokers DJ-ing. (The duo are StackBlitz investors). Simons held court, schmoozed and chatted, with a wide grin and seemingly endless energy. Through the din, I asked him if he was concerned about rival AI coding services nipping at his heels. After all, it had been about seven months since Bolt launched — a lifetime in Silicon Valley AI circles. Simons seemed unperturbed. He said the years of hard work that StackBlitz spent developing its WebContainers technology gives Bolt an edge that most rivals don't have. This allows Bolt-based applications to be built and run applications using the chips on customers' devices, such as laptops. Other AI coding providers must tap a cloud service each time a user spins up a project, which can get very expensive and technical, according to Simons. "People assume we're a startup that just launched yesterday," he said. "But we're an overnight success, seven years in the making." A party duel with Figma The competition doesn't wait long to respond in Silicon Valley, though. A few San Francisco blocks away, on the same day as Bolt's hackathon party, graphic design giant Figma announced a competing product at its annual Config conference. Figma Make is a new tool that helps developers create web apps using conversational prompts, rather than specialized software code. Sound familiar? "We believe there are multiple huge companies to be built here, and that the market for engineering is bigger because of AI," Guo said. Simons noted that this new Figma service doesn't use the same WebContainers technology that supports Bolt. "We wrote an operating system from scratch that runs in your browser. It's completely different from what Figma has," he argued. Still, I could tell Figma had made an impact. "What are the odds that we were throwing a giant party on the same day as their launch across the road? I'll leave that to your writer's imagination," Simons told me, with a giggle.
Business Insider
16-05-2025
- Business
- Business Insider
An exclusive look inside the hottest legal AI startup
Hello, and welcome to your weekly dose of Big Tech news and insights. I'm your host Alistair Barr. My dog Maisie is having surgery soon, so keep her in your thoughts. I recently met a friend for coffee, and he shared some surprising news. After working in cloud computing for roughly 20 years, he's moving from Silicon Valley to the UK. Would you leave Silicon Valley right now? Where would you go? (Send me a note if you want to share.) If you're interested in living in other places, check out our stories on moving to India, Canada, and Spain. Agenda This week, we're talking about how generative AI is changing professional services, especially law firms and consulting. We'll also take a look at the Silicon Valley chatter right now, including Meta's turning point, Google's pickle, and Microsoft's new AI vision. And I'll experiment with an AI tool and show you the results — something I hope to do each week, and get your responses and recommendations. Central story unit I went to a party in San Francisco recently. Yeah, I know, crazy. Actually, it was a bit wild, in a lovable, techy way. StackBlitz threw a "hackathon" event to show off its AI coding service called It's a hot product right now, and the party was packed. The Chainsmokers DJ-ed, and I zipped around chatting to as many people as possible, with my tech buddy Dave in support (if questions got too technical!). I met one person who said she worked at Harvey, a startup that's using generative AI to help lawyers operate more efficiently and automate parts of legal work. I asked what she did, and she said she was a lawyer. I assumed she'd be a software engineer, working for an AI startup. But no, she's a fully qualified attorney who, instead of advising clients, helps to train Harvey's AI models to be better at law. Right on cue, BI's Melia Russell has an in-depth, exclusive look at Harvey. She visited founder Winston Weinberg and learned some important scoopy stuff about the company's latest moves and how it's tackling growing competition in the suddenly hot legal tech market. The legal profession is pretty well suited to large language models and generative AI. It's based mostly on rules, laws, and other dense, complicated text. Legions of law firm associates usually spend years learning how to parse and interpret this information for clients. Now, all this content, along with decades of legal decisions and other records, is being used as training data to develop specialized AI models and tools. AI needs high-quality training data, and in the legal profession there's a ton of it. The end result is tools like Harvey that can automate some of the busy work that previously bogged lawyers down, and could change how the entire profession operates. You know what other industry has AI potential? Consulting. The Big Four, Deloitte, EY, PwC, and KPMG, are investing in AI agents to "liberate" employees from thousands of hours of work a year. For instance, generative AI tools are pretty good at creating PowerPoint slide presentations. Do you feel liberated? News++ Other BI tech stories that caught my eye lately: Check out BI's amazing Seed 100 project! Exclusive: Microsoft is working on a new Copilot, and a grand "Agent Factory" vision. Meta's Llama has reached a turning point. Exclusive: Amazon hopes AI-powered robots will help it hire fewer humans. Exclusive: We found 200 "podcasts" peddling opioids. Spotify is taking them down. Eval time My take on who's up and down in the tech industry right now, including updates on Big Tech employee pay. This is based on an evolving, unscientific system I developed myself. (A bit like AI model benchmarking these days!) UP: Tim Cook probably breathed a sigh of relief after the US and China paused those really high tariffs. Although it's not out of the woods yet, Apple stock jumped this week. DOWN: Google is in an antitrust quagmire, and ChatGPT may be eating into its prized Search business. Take a look at this metric. It's not great. We'll see if the company has answers next week at its big I/O conference. COMP UPDATE: This data from made me look. Software engineers (SWEs) — if you're not in AI, your tech compensation may not rise as much as it once did: From the group chat Other Big Tech stories I found on the interwebs: Meta is struggling to improve its next big AI model. (WSJ) Are you ready to " eye-scroll"? (Bloomberg) The huge Stargate AI project is facing delays. (Bloomberg) Microsoft and OpenAI are in negotiations to revise their partnership. (FT) Perplexity's valuation jumped to $14 billion in a new funding round. (WSJ) AI playground This is the time each week when I try an AI tool. Is it better than what I could have done myself? Was it faster and more efficient than asking a technical colleague for help? I need you, dear reader, to help. What am I doing wrong? What should I do, or use, next week? Let me know. I started off simple. I asked ChatGPT (Enterprise 4o) to create an image that sums up the past week in tech. I told it to use Business Insider style. Here's what it came up with: This is after a couple of pretty bad initial attempts. The image is not bad, but not amazing. The Samsung blue blob logo is floating by itself down there. Why? Who knows? It's true that Google is prepping for I/O. It also seems to have mixed up Apple and Samsung? And I couldn't find news related to new real-time features added recently to OpenAI's GPT-4o model. (I asked OpenAI's PR dept and will let you know if they respond.) It used an old BI logo, too. User feedback I would love to hear from anyone who reads this newsletter. What am I doing wrong? What do you want to see more of? Specifically, though: This week, I want to hear back from folks who work in professional services, such as lawyers and consultants. Attorneys: What's your experience been with Harvey AI and similar AI tools so far? Has this tech helped you get stuff done faster and better for clients? Or not? Are you worried legal AI tools might replace you in the end? Will it change the law firm business model? Or is this another tech flash in the pan that won't amount to much? Let Melia Russell and me know at mrussell@ and abarr@
CNBC
07-05-2025
- Business
- CNBC
Figma introduces 'vibe-coding' AI software design feature
From left, Steven Levy, Wired editor at large, and Dylan Field, co-founder and CEO of Figma, speak onstage at Wired's The Big Interview event in San Francisco on Dec. 3, 2024. Design software startup Figma on Wednesday debuted an artificial intelligence feature to automate the process of building websites and applications. The new feature, called Figma Make, is the company's response to the rise of "vibe-coding" tools, which turn a short written description into the source code necessary for a website. Google and Microsoft have both touted their own "vibe-coding" tools this year. OpenAI has also entered the space, holding acquisition talks with one startup in the space, Windsurf, and reaching out to another called Cursor on multiple occasions, CNBC reported. The move might draw additional business to Figma, which confidentially filed for an initial public offering last month. Many of today's "vibe-coding" products offer a free tier for light use before requesting payment. Figma Make will only be available to those with full seats that start at $16 per person per month when purchased annually. The company is beta-testing the feature with those users. People with premium subscriptions likely work for companies that store font sizes, color combinations and other design assets in Figma. Over time, the new feature will be able to create designs that adhere to those design systems. Figma's new tool relies on Anthropic's Claude 3.7 Sonnet AI model. For those who don't want to start from scratch, Figma Make can alternatively accept Figma design files as an input and generate code that approximates them. Third-party products such as Vercel's v0 and StackBlitz's offer similar capability but can't inherit existing design systems. Like many other "vibe-coding" programs, Figma Make presents a chat box to ask for and receive adjustments of drafts it comes up with. But sometimes a simple fix such as a font change is all that's necessary. Drop-down menus for specific elements allow for quick alterations, meaning that there's no need to consult the AI model again and wait for a response. Customers who received early access to Figma Make got it to craft video games, a note-taking app and a personalized calendar, a spokesperson said. That doesn't mean there's no place for designers inside companies with the advent of AI. "The more time has gone on, the more that I'm confident in a designer's role — and believe that it's going to be one of the critical roles in bulding software in the future," Dylan Field, Figma's co-founder and CEO, said in conversation recently with Garry Tan, president and CEO of Silicon Valley startup accelerator Y Combinator. Also on Wednesday, Figma said it was beginning to test Figma Sites, another feature that requires full seats. It can convert designs into working websites. Support for AI code generation will follow in the next few weeks, Figma said. WATCH: The rise of AI 'vibe coding'
Forbes
24-04-2025
- Business
- Forbes
Why Tech Founders Need To Get Medieval About Moat Building
The barriers to creating software are lower than ever. You can now vibe code new products in hours using tools like Lovable and That's good news for innovation, and even better for access. Open-source models, no-code platforms, and off-the-shelf AI have made it faster and cheaper than ever to get an idea off the ground. This shift is opening doors for people who've historically been shut out of tech. And when something is cheaper to build, it's often cheaper to bring to market, meaning tools can reach more of the people who actually need them. But in practice, this means building is no longer the biggest challenge for startups. Staying out in front is. Retention, customer loyalty, and scaling revenue are the real hurdles now. A clever idea or beautiful product is no longer enough. The moment you launch, someone else could clone your offering – often faster, cheaper, and louder. For many years, founders have been focused on differentiation: the thing that makes them special right now. But in this new landscape, founders will be forced to give more thought to defensibility: what will keep your startup unique in 10 years, 5 years, or even next year? That's where 'moats' come in: shields that protect your business from competitors over time. The things that make you hard to copy, hard to replace, and hard to overlook. Some moats are defensive, built to keep rivals at bay. Others are offensive, giving you the tools to charge ahead, attract more customers, and deepen user relationships. Founders will need to start thinking about these moats much earlier and use them to fortify their position, before they're under siege. In other words, it's time to get medieval about moat building. So where to begin? Driving 'stickiness' through social graphs Communities are tough to replicate. One of the best ways to make your customers stick around is by building a product that taps into users' social networks, making them feel personally invested. When your product encourages connections – whether through recommendations, collaborations, or incentives – it creates a sticky ecosystem that's hard for competitors to steal. It's one of the reasons I was drawn to babysitting app Bubble (an Ada Ventures portfolio company) as both an investor and a parent. The app allows you to add your friends and see which sitters they've used and would recommend, adding a social referral component that makes the service feel personal and trustworthy. Market-leading apps like Duolingo, where users can compete on language-learning scores, or Strava, where runners can compare their times and share achievements, also tap into the power of social graphs to nurture loyal users. These social connections make these products drive social capital, making them much harder to discard. Making hardware and software click Another interesting approach to defensibility is integrating hardware and software in a way that makes them feel inseparable and essential to your product. While the hardware itself might not be inherently defensible, the software layer can make it stickier, creating a more compelling and harder-to-replicate offering. Take Oura: a physical, stylish gadget that works hand-in-hand with an app that turns raw data into personalised health insights. It's the interplay between the hardware and software that creates a dynamic, tailored experience that gets smarter over time, making the whole system hard to copy. For startups, the key is to make the combination of hardware and software feel indispensable to users. It's not just about having a functional gadget or app; it's about ensuring both elements work in harmony to deliver a solution users can't – or wouldn't want to – seek elsewhere. Using the power of proprietary data and partnerships Proprietary data is one of the most powerful moats you can build. When you gather unique insights that others can't get their hands on, you're not just collecting numbers, you're creating an asset that's nearly impossible to replicate. It could be anything from user behaviour patterns to clinical trial data. This information doesn't just help you fend off competitors, it can also be the secret ingredient that lets you refine your product and stay ahead of the curve. And with this kind of valuable data in hand, exclusive partnerships become an even more powerful tool. By leveraging your unique insights, you can form strategic alliances with key players, from suppliers to academic institutions, celebrities and industry leaders, creating barriers for competitors. It's not a strategy for every startup, but if you can land the right exclusive agreements, you'll lock down your position and make it much harder for others to break in behind you. Choosing the right backers Founders shouldn't be digging out their moats alone. The best investors don't just write a check and disappear – they get in the trenches with you. Think about potential investors' experience and network. Can they provide warm intros to help land exclusive partnerships? Do they have the technical expertise to advise on product development? Can they help you hire top talent or connect you with a PR team that understands your messaging? Beyond strategy, are they able to empathise with the founder journey from first-hand experience? The right investors should help you to deepen your moat. That said, make sure you've thought about defensibility before seeking investment as investors will want to know why you believe your startup is futureproofed. Dedicate a slide to your moat in your pitch deck and be ready to explain why your idea isn't just good, but defensible in the long term. Protecting your edge with legal safeguards Patents and copyrights can be helpful defensive moats, especially for deep tech companies. They won't be necessary or relevant for every startup, but if you're building something where legally protecting your ideas is an option, it should definitely be part of the conversation. The practice isn't just about keeping copycats at bay; it can also signal to investors and potential partners that you've thought long-term about owning your unique value proposition. In fact, research from the European Patent Office suggests that startups with secured patents and trademarks are up to 10x more likely to raise seed or early-stage funding. Legal protections can also keep you safe from being blindsided by someone else patenting your idea and suing for infringement. But, again, patents and copyrights are not always the right fit for every business – whether they make sense depends on the nature of your product, market, and long-term strategy. Moats aren't built overnight. The water might already be there, but it takes deliberate, human effort to turn it into something strategic. If it's easy for the competition to cross, your moat's too shallow and it's time to dig deeper. Whether you're playing offense or defense, I'm looking for founders who are intentional about what truly sets them apart.
Yahoo
18-03-2025
- Business
- Yahoo
Cognition AI's valuation soars to $4bn after latest funding round
Cognition AI, a developer of an AI-powered coding assistant, has secured 'hundreds of millions of dollars' in its latest funding round, reaching a valuation close to $4bn, reported Bloomberg. The round, which doubled Cognition AI's previous valuation, was led by 8VC, the venture capital firm backed by Joe Lonsdale, sources familiar with the development told the publication. Cognition's roster of backers includes firms such as Founders Fund, Khosla Ventures, Elad Gil, and Conviction Partners, with several existing investors also participating in the latest funding round. The startup launched its generative AI coding tool, Devin, just over a year ago. Cognition positions Devin as 'the world's first AI software engineer,' a tool designed to enhance coding efficiency by automating repetitive tasks, predicting bugs, and potentially completing entire software projects autonomously. Cognition AI's generative AI coding tool, Devin, has been branded as "the world's first AI software engineer". The tool is capable of planning and executing intricate engineering tasks and can recall relevant context at every stage, learn over time, and rectify errors. The AI has been equipped with a suite of common developer tools, including a shell, code editor, and browser, all within a sandboxed computing environment. Other startups in the AI coding space are also attracting significant valuations. Anysphere, which is developing the AI code editor Cursor, in also talks to raise funding at a $10bn valuation, according to Bloomberg. StackBlitz, another competitor in the space, is also in discussions to raise capital at a valuation of $700m for its AI tool, designed for building websites, the Bloomberg report added. "Cognition AI's valuation soars to $4bn after latest funding round " was originally created and published by Verdict, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
