Lovable raises $400 million, doubling valuation to $13.3 billion

AI vibe-coding startup Lovable doubled its valuation to $13.3 billion in a $400 million funding round led by Menlo Ventures and EQT.

AI vibe-coding startup Lovable raised $400 million at a $13.3 billion valuation, more than doubling its December valuation and catapulting the Stockholm-based company into the ranks of Europe's most valuable startups. The platform, launched in November 2024, lets users build software and web applications using everyday language.

"Lovable will be Menlo's largest single investment after Anthropic — a testament to how bullish we are on Lovable's outlook," said Matt Murphy, a partner at Menlo Ventures.

The company projects a revenue run rate of nearly $600 million by the end of this month, almost triple the level it disclosed in December. Lovable plans to grow headcount by 50 percent to 450 employees this year across offices in Europe and the U.S., and expand into Latin America. Clients include chipmaker Nvidia, sportswear company Adidas, publisher Hearst, and helpdesk software provider Zendesk.

The funding round was co-led by Menlo Ventures and the European Commission's newly created Scaleup Europe Fund, a vehicle managed by Swedish asset manager EQT. Other backers include Balderton Capital, World Innovation Lab, and China's Tencent. The deal tests whether Europe can retain its most promising AI startups as they scale.

Vibe-Coding Competition Intensifies

Lovable operates in a crowded field of AI application-building tools. California-based Replit reached a $9 billion valuation in a March funding round — triple its level six months prior. The growing use of AI to develop in-house apps has also raised investor concerns that products from business-software companies could become obsolete in a so-called "SaaSpocalypse."

Zendesk, which uses Lovable internally, doesn't see the platform as a threat to its core business. "Lovable can't provide the level of reliability at scale" to manage customer requests across different channels, said Jorge Luthe, a senior director of product at Zendesk.

The revenue trajectory is notable for a company that launched just over a year ago. Lovable was previously profitable but is now focused on investing in product and growth, according to CEO and co-founder Anton Osika. Some startup founders now run their entire businesses on software built with Lovable, he said.

The vibe-coding segment has become one of the most competitive corners of the AI application layer. Beyond Replit, other players are racing to capture developers and non-technical users who want to build tools without writing code. Lovable's differentiation lies in its focus on business applications — HR, sales, and finance functions — rather than general-purpose coding assistance. The company's customer roster, which spans Nvidia's internal project tracking to Adidas's operational workflows, suggests the platform has moved beyond hobbyist use into enterprise deployment.

Europe's Startup Retention Test

For the EQT-managed Scaleup Europe Fund, the investment is an early test of its ability to keep European startups from relocating to the U.S. as they scale. If startups like Lovable end up backed predominantly by U.S. investors, "the shift towards relocating headquarters or listing in the U.S. becomes powerful," undermining development of new technology in Europe, said EQT partner Victor Englesson.

The valuation jump from $6.6 billion in December to $13.3 billion reflects investor appetite for AI application-layer companies that can demonstrate real revenue traction in a short window. Lovable's projected run rate of nearly $600 million would place it among the fastest-growing software companies in Europe, though the company has not disclosed whether it remains profitable at that scale.

The company is also working to add more security features and improve reliability as it expands. For investors tracking the AI software sector, the deal shows that application-layer AI companies with proven revenue can command valuations comparable to infrastructure players. Publicly traded software names may face continued pressure as investors weigh the risk that AI-built applications could erode traditional SaaS pricing power.

This article is for informational purposes only and does not constitute investment advice.