Replit: Raising $80M to build the global computing platform of the future
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Today, Replit is announcing an $80M series B to achieve a core mission:
Build a global computing platform that enables any person, anywhere in the world with basic tools (e.g., internet & a Chromebook) to learn to code, build products, and effectively launch them, driving the largest path to economic mobility in the last century
The round is led by Coatue with participation from Peter Thiel, Paul Graham, a16, and many more.
What exactly does this mean? Well, I originally wrote about Replit back in February, but a lot has changed since then. I truly believe Replit is one of the most important companies of the next decade, so today, let's do a double-click into why.
The context: We are in the first inning of digital transformation
Investment in technology companies, as well as liquidity events (e.g., IPOs) have hit all-time highs. As a result, it is easy for people to call it a bubble. Asset prices may very well be over-extended, but it is a trap to use historical performance as the primary indicator. In reality, we are in the midst of many digital transformations, and when you zoom out, there are many reasons to believe we are still actually early.
Next week, I will go into greater depth, but at the highest level, here are five indicators that we are still very early in global digital transformation:
Internet access
Affordable technology
Coding literacy
Concentration
Scale
The problem: Income inequality
These five constraints above are critical to solve. Participation in digital transformation and wealth creation is critical to economic mobility. Seven of the top 10 billionaires in the world made their money in technology.
And up until this point, an outsized concentration has occurred in a tiny geographical area: Silicon Valley.
As a result, consider these eye-popping stats from 2019:
Half of the world's tech billionaires lived in Silicon Valley (Source)
At ~$128k per capita, Silicon Valley output outpaces every nation (Source)
Bay Area-based tech IPOs produced +$230B windfall and +6,000 millionaires... in 2019 alone (Source)
Technology is the ultimate equalizer, and over-concentration in ANY area puts people at a systemic disadvantage. Consider these quotes from the World Economic Forum (WEF) Social Mobility Report:
"The economic dynamics of digital platforms, big data and automation are increasingly promoting market concentration and ‘winner-takes-all’ markets. The main beneficiaries of these changes have been owners of technology or intellectual or physical capital—innovators, investors and shareholders—which has contributed to the rising wealth and income gap between those who depend on their labour and those who own capital"
"Access to technology has the potential to act as a further equalizer, by providing information to everyone irrespective of their socioeconomic background"
"New technology adoption drives business growth, new job creation and augmentation of existing jobs... access to technology can vastly expand the earning opportunities available to people by enhancing the market available to them to find roles, deploy their skills or share their assets"
Providing universal, affordable technology access is a critical lever to improving equality. PERIOD. End of story.
So, how are we doing? Well, not great.
There are huge disparities between top performers (the United States) and bottom performers (Africa). As a result, WEF concludes, "The promise of leveraging technology for social mobility leapfrogging remains largely unfulfilled."
To summarize: The digital transformation is just beginning
The digital transformation is still early
It is generating significant value and wealth creation
Only a small number of people are participating, increasing wealth inequalities
While improving, the main blocker continues to be access to technology and resources
This is where Replit comes in.
The solution: Replit
We discussed the five indicators that the industrial to technical transformation is still early. For each, we are already seeing change (examples non-exhaustive):
Internet access: Starlink and Astranis are improving coverage with satellite based internet
Affordable technology: The Google Chromebook is as low as ~$100
Concentration: For the first year, +50% of the Venture deals are outside of the US
Scale: Venture spending is at all-time highs
On the left-hand side, you have access & adoption constraints being resolved. On the right-hand side, you have capital & resource constraints being solved.
Bridging the two, however, is the keystone: coding literacy. It is the foundational component that accelerates the entire transformation, taking <1% of people contributing to 10x, 20x, etc.
This is Replit's core focus. The keystone bridging the entire process. The new computing platform that allows any creator in the world with a basic internet connection and device to learn, build, and monetize their creations. Let's talk about how.
Replit is building a "low-floor and high-ceiling product." What exactly does this mean?
If you have never seen code before, you can jump on and begin learning. If you are extremely experienced, you can login within seconds, connect your Github, and begin testing new code.
And this is critical. Until now, access to technology has been much more limited. We saw it early in the United States (example: Bill Gates example in Outliers), and while we have improved, this continues to play out domestically and globally.
The best example I can think of is exhibit 5. Until now, programmers (likely unknowingly) have been able to succeed because of four pillars:
Access
Education
Community
Resources
Note: this is within "coding literacy"; it is assuming a basic piece of hardware and internet access
If you live somewhere in the world without one of those four, you have been on the outside looking in (left-hand side). Today, however, Replit is addressing all four pillars and building a new world "right-hand side" where anyone can walk in and participate.
Access
First, Replit is enhancing access by building the most powerful, in-browser development environment in the world. Previously, aspiring creators were required to purchase expensive computers and software programs. Not anymore.
Replit allows people to begin programming frictionlessly.
Exhibit 6: Example of quick login
Within seconds, programmers of any experience level can open Replit and begin coding in +50 languages. Here is an example of the Replit interface:
In Exhibit 7, I am just troubleshooting how functions work (as part of my intro to Python curriculum I am working through). Ignore the terrible code, and instead, look at the three main areas I highlighted:
Code: Portal to type the program you are running
Run: Button to instantly Read-Evaluate-Print (and Loop... this is what REPL stands for) the code you have typed
Output: The output of your code
Instantly, I basically have a sandbox that will very quickly help me learn and troubleshoot code. Anyone in the world can instantly have compute power at their finger tips... for free.
You heard that right. Replit offers a Freemium model. You can instantly get access to basic functionality (e.g., for learning) for free. There are of course instances where you need to pay for enhanced compute, storage, etc. (Hacker or Teams), but fundamentally, anyone in the globe has access to Replit at no charge.
This frictionless entrance is already bringing people online quickly.
Exhibit 9: Replit user growth as of 12/2020
As of roughly a year ago, Replit already had 5M users, and they were growing exponentially. Today, it is likely that number has nearly doubled!!!
Exhibit 10: India is second largest country represented on Replit
And this is not a United States only movement. This is a global movement. The second largest country being represented is India (with Indonesia, Africa, etc. having representation as well).
Education
Access to this tool is impressive, but it does not matter if people cannot learn to use it. Here is where Replit's core mission comes into play: Code, learn, and create together.
We saw in Exhibit 8 that Replit specifically has a product for Education Teams. Classrooms can learn this to actively code. Even within the freemium model, however, anyone can access Replit and see a wealth of courses across languages.
Within each course, there are step-by-step lessons that you can walk through and test in Replit (similar to the functions example in Exhibit 7).
These courses are created by brilliant programmers across the globe, some of which are Replit employees (CS teaching legend YK Dojo; YouTube Lessons)
Exhibit 12: Quote from a Replit teacher on Africa education
The education effort extends beyond just self-serve courses. Replit is actively working & enabling teachers across the globe...
Exhibit 13: Replit hackathon support
While supporting hackathons globally. Net: Replit wants to help anyone, regardless of location, age, socioeconomic background, etc. learn to code FOR FREE.
Community
You have probably already realized the numbers are staggering. Millions of users (Exhibit 9). Globally distributed (Exhibit 10). That's in large part because Replit works very hard to foster an active community.
Within the environment shown in Exhibit 7, there are forums for Replit users to interact. Thousands (if not millions) of users engage daily.
Additionally, you may have seen in Exhibit 8 that multiplayer coding is an option. Basically, you can co-edit code like teams might edit Google Docs. This could range from building separate parts to actually helping, editing, etc. each other's code.
This community component is becoming incredibly strong. Two examples.
Exhibit 15: Replit game jam
First, Replit held a Kaboom Game Jam. The user to make the best game within the allotted time won $10,000. Guest builders joined. HUNDREDS of people built and submitted games. That may not feel like a lot, but that is a huge number of people producing net new games within a short period of time.
Exhibit 16: Rust course responses
Second, Replit announced they were creating a course on Rust. Within 30 minutes, 120 active people on Replit reached out!!
Resources
Finally, the last pillar is resources. Replit has removed all friction to access the technology, provided extensive education opportunities, and created a robust active community... all for free. Finally, they pair all of this with resources in three primary ways:
Powerful development tools
Instant deployment
Financial opportunity
First, the development tools. Remember Exhibit 5. The "high-ceiling." Replit is constantly building increased functionality.
Exhibit 17: Open source example
Over the past year, Replit has taken it to a new level. From having access to all open source at your fingertips (exhibit 17) to access to +80,000 Nix Packages to Web3 development, Replit is turning the most frictionless environments in the world into one of the most powerful.
Second, Replit is helping creators host their apps, bots, websites, etc. immediately. Remove the complexity. Learn. Code. Create. And immediately deploy.
Exhibit 18: Replit website and webapp growth
If it sounds too good to believe, then think again. As of last month, Replit passed over 20M websites and webapps hosted!!!!
Finally, we are talking about financial resources. Replit themselves will not pay you, but they are creating extremely innovative ways to help users gain financial resources for their ideas. As we mentioned earlier, the reward for the game jam was $10,000.
Exhibit 19: Balaji 1729 example
Additional examples include:
Partnering with Balaji (and 1729) to offer dollar rewards for completing tasks
Creating Replit Ventures, funding top ideas with $2,000 in BTC
The future: Understanding the next phase post-Series B
By now, you are hopefully convinced that Replit is one of the most important companies of the next 50 years. As Paul Graham said, this is Apple and Microsoft vibes.
The craziest part? Until this point, Replit has raised <$25M and has <50 employees! In this next phase, I have three predictions about what is coming:
Increased velocity
Economic mobility
Business adoption
First, the velocity of Replit building / shipping feels fast... but it is about to get a lot faster. They are the ultimate accelerant. Not only will the funding help, but Replit is starting to build new products... on Replit!!! The ceiling is truly raising, and it will only continue to go up. The best is yet to come.
Just to give you a sense of the current velocity, Packy McCormick published some of Replit’s metrics since the last round.
Second, we will see huge increases in monetization and economic mobility.
Exhibit 21: Replit creator monetization example
In my last post, I highlighted an example Paul Graham gave. 20 year old programmer builds an app and generates +$1k in Monthly Recurring Revenue. This is just the surface. As Amjad says, "Replit will shorten the distance between ideas and wealth by a 100x." In these next few years, I genuinely believe we will see programmers around the world generate millions (if not billions) in wealth by building on Replit.
Finally, as we see Replit get stronger, I think we will see more businesses leverage this tool. Non-technical (e.g., marketing, finance) will use it to write bots to automate basic tasks (e.g., Python to adjust csv files). Technical employees will end up using it as a tool to test features and collaborate.
Ultimately, Replit will become a combination of Figma and YouTube for programmers. It will be both the cloud-based collaboration platform for developers, as well as the central hub for creators to build, host, and monetize their products. Prior to YouTube, it was hard to host and monetize video content. Now, creators make millions.
This is just the beginning for programmers, and Replit is leading the way, building the ultimate level playing ground for the globe.