Investors are betting there is room for another startup that leverages artificial intelligence to help software engineers write code faster. What sets Kilo Code apart is that it counts former GitLab CEO Sid Sijbrandij among its founders.
On Wednesday, Kilo Code announced an $8 million seed round backed by Breakers, Cota Capital, General Catalyst, Quiet Capital and Tokyo Black.
Sijbrandij, a self‑taught developer who helped turn GitLab into a leading platform for source‑code collaboration, deployment and testing, guided the company through its 2021 IPO and a market valuation exceeding $6 billion. He stepped down as CEO last year to focus on cancer treatment initiatives but remains the board chair.
Since then, the technology sector has become obsessed with using large‑language models to write and update software—a practice Silicon Valley labels “vibe coding.”
OpenAI co‑founder Andrej Karpathy is credited with coining the term in early 2024. At one point, OpenAI explored a $3 billion acquisition of AI‑coding startup Windsurf before the deal fell through. Google subsequently hired senior Windsurf talent in a $2.4 billion transaction in July, while rival Cursor secured a $2.3 billion funding round in November, valuing the company at $29.3 billion.
Microsoft, another early adopter, reported that AI‑generated code now accounts for roughly 30 percent of its codebase, according to CEO Satya Nadella’s April remarks.
Sijbrandij observed this rapid shift firsthand and became fascinated by AI’s potential to reshape software development. In September, an acquaintance introduced him to Scott Breitenother, founder of the consultancy Brooklyn Data, which he later sold.
“I thought we were just having a quick meet‑and‑greet, and 25 minutes in Sid said, ‘Hey, can you start next week?’” Breitenother recalled.
Sijbrandij provided early capital for the venture, which now employs roughly 34 people across multiple continents. Breitenother leads day‑to‑day operations and maintains frequent conversations with Sijbrandij.
Kilo Code’s platform integrates with popular development environments such as Cursor and Microsoft’s Visual Studio Code. It is the most widely used service on OpenRouter’s API, granting developers access to a range of AI models, including Grok Code Fast 1 from Elon Musk’s xAI. In the past month alone, Kilo Code processed more than 3 trillion tokens—each token representing about three‑quarters of a word.
Software engineer Daniël Langezaal of Dutch e‑commerce startup Plug & Pay has been using Kilo Code for several months after trying solutions from Anthropic, Cursor and Microsoft. He appreciates Kilo Code’s support for both premium and cost‑effective models and values the open‑source contributions that power its extension.
According to Langezaal, roughly 80 percent of Plug & Pay’s developers now rely on Kilo Code. The tool helped one teammate generate a complex SQL query in a single day—a task that would have otherwise taken several days.
“With Kilo, it took him a day. Without it, the implementation would have stretched over a few days,” Langezaal said.
GitLab, which is testing an internal platform for AI agents, has taken note of Kilo Code’s progress. “I talked to the board,” Sijbrandij explained. “We decided to pursue this outside of GitLab.”
In a recent filing, GitLab disclosed a $1,000 right of first refusal for a ten‑day window should Kilo Code receive an acquisition offer before August 2026.
The market continues to evolve rapidly. Design‑software leader Figma and numerous startups now offer vibe‑coding capabilities aimed at less technical users, expanding the addressable pool for AI‑assisted development tools.
“We also want to be the go‑to platform for people just getting started with code,” Sijbrandij said. “We are building an app‑builder that feels more like the experiences offered by Lovable and Bolt.”
Lovable, a Sweden‑based startup, secured a $1.8 billion valuation in July, underscoring the growing appetite for low‑code, AI‑driven development solutions.
**Industry Outlook** – Kilo Code’s emphasis on seamless integration with existing IDEs, its multi‑model API strategy, and its early traction among development teams position it well in a crowded field. As enterprise software budgets increasingly allocate funds toward AI‑enhanced productivity, startups that can demonstrate measurable reductions in development cycle time—like the day‑versus‑multiple‑days gains cited by Plug & Pay—are likely to attract further venture capital and strategic partnership interest. However, the sector faces challenges around model transparency, code security, and intellectual‑property compliance, which will require robust governance frameworks. If Kilo Code can navigate these hurdles while scaling its token processing capacity, it could capture a significant slice of the burgeoning “vibe coding” market, potentially positioning itself as an acquisition target for larger platform players seeking to embed AI more deeply into their development ecosystems.
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