Introduction to Lovable’s Funding Round

Lovable, a prominent figure in the vibe-coding world and one of Europe’s fastest-growing AI startups, is currently in the process of raising a substantial round of funding exceeding $150 million, with a valuation nearing $2 billion, as reported by the Financial Times.

Recent Funding and Growth

This significant raise and substantial increase in valuation come just a few months after Lovable secured a $15 million funding round led by Creandum in February. The company referred to this previous round as a “pre-Series A” round when speaking to TechCrunch. However, given the large amounts involved, it is clear that Lovable has transitioned from seed funding to priced growth rounds, regardless of the specific serial alphabetic labeling. Accel is reportedly leading this new funding round, with participation from existing investors such as Creendum and 20VC.

Company Background and Product

Although Lovable is technically only two years old, having been founded in 2023, it launched its web app-building product in late November of the same year. In a tweet from May, Lovable CEO Anton Osika announced that the company had achieved $50 million in Annual Recurring Revenue (ARR) within just six months.

Product Capabilities and Pricing

Similar to its competitors, such as Replit and Bolt, Lovable develops complete web applications from an initial text prompt. This includes creating a user interface/front end, often utilizing the popular UX coding tool React, and connecting it to a database like Supabase. The service is considered affordable, with pricing starting at $25 per month for 250 “credits.” A Reddit user demonstrated the potential by building an app with over 29,000 lines of code and dozens of functions for $250.

New Developments and Business Model

On Monday, Lovable announced the beta release of an AI agent capable of automating tasks such as editing code after reading project files or debugging. The company will employ a usage-based pricing model for this feature, where the cost is determined by how frequently the agent is utilized. This means that the more tasks the agent performs, the more credits it will charge.

Implications and Investor Sentiment

While this new feature might increase costs for users who opt for automated app management, the usage-based pricing model is becoming a standard in the industry. This is partly because AI startups themselves incur variable fees from model providers like OpenAI or Anthropic. Such business strategies are likely to appeal to investors, indicating a promising future for Lovable and similar startups.

Conclusion and Non-Disclosure

Accel, 20VC, and Lovable have not responded to requests for comment on this matter, maintaining their silence on the upcoming funding round and the company’s future plans.