🧑💻 Developer-First #159 - AI coding tools just added $1.3 billion in ARR in one year
The AI developer tools market is growing faster than anyone expected.
Hello friend,
One of the most striking insights from Coatue’s latest “East Meets West” presentation is that, as of June 2025, the combined ARR for AI coding tools exploded to $1.6 billion while in June 2024, GitHub Copilot was the only tool generating meaningful revenue at ~$300M ARR 😵
In just a year, a wave of fast-growing players like Cursor, Windsurf (likely acquired by OpenAI), Replit (who just passed $100M ARR) or Lovable (🇸🇪, already >$60M ARR after just months on the market) saw their usage and revenue explode.
What’s driving this?
📈 Massive enterprise adoption of code copilots;
📈 The rise of new interactive developer experiences (“vibe coding”);
📈 Demand for more reliable, specialised, and DevOps-integrated AI tools.
One thing is clear: AI-assisted coding is rapidly becoming a multi-billion-dollar category… and we’re just getting started.
Now, let's dive into last week's developer-first transactions.
💰 Market Summary - Week of June 23rd, 2025
12 companies raised $2.165 billion across 7 product categories in 6 countries (including a staggering $2 billion seed round for Thinking Machines Lab 😳).
Europe-based companies attracted 1.1% of the total funding vs 98.7% for North America-based companies and 0.2% for Africa-based companies.
AI is the category that attracted the highest funding.
3 companies provide or contribute to an open-source product.
2 companies were acquired last week.
🧩 Funding by Product Category
🌎 Funding by Region
🏢 Funding By Company
Thinking Machines Lab, from San Francisco 🇺🇸 raised $2 billion in Seed funding led by Andreessen Horowitz. Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, is building AI research and products to make AI accessible for everyone. (more)
OpenRouter, from San Francisco 🇺🇸 raised $40 million in Series A funding led by Andreessen Horowitz and Menlo Ventures. OpenRouter is a router for LLMs with 180+ models, explorable data, private chat, and a unified API. (more)
LanceDB, from San Francisco 🇺🇸 raised $30 million in Series A funding led by Theory Ventures. LanceDB is a developer-friendly, open-source database for AI. (more)
Botpress, from Quebec 🇨🇦 raised $25 million in Series B funding led by Framework Venture Partners. Botpress is a fully extensible open-source chatbot and AI agent platform for enterprises. (more)
Eventual, from San Francisco 🇺🇸 raised $20 million in Series A funding led by Felicis Ventures. Eventual’s high-performance data engine, Daft, provides reliable data processing for any modality and scale. (more)
Lyceum, from Zurich 🇨🇭 raised $12 million in Pre-Seed funding led by Redalpine. Lyceum simplifies AI model deployment by automating infrastructure provisioning directly from your IDE. (more)
Qualytics, from Atlanta 🇺🇸 raised $10 million in Series A funding led by BMW i Ventures. Qualytics improves data quality through proactive anomaly detection and workflow integration. (more)
Skyramp, from San Francisco 🇺🇸 raised $10 million in Seed funding led by Sequoia Capital. Skyramp is an AI-driven testing platform that auto-generates functional and performance tests for development teams. (more)
PoliCloud, from Cannes 🇫🇷 raised $8.3 million in Seed funding led by Global Ventures. PoliCloud offers a sovereign, sustainable, micro data centre-based cloud alternative for full data control. (more)
Better Auth, from Addis Ababa 🇪🇹 raised $5 million in Seed funding led by Peak XV. Better Auth offers a comprehensive open-source authentication and authorisation framework for TypeScript. (more)
Waypoint AI, from San Francisco 🇺🇸 (with French roots 🇫🇷) raised $3.1 million in Pre-Seed funding led by 42CAP and Dreamcraft Ventures. Waypoint AI manages escalation triage, deflection, routing, and postmortems using LLM-powered agents. (more)
LiveDrop, from Eindhoven 🇳🇱 raised $2.5 million in Seed funding led by Value Creation Capital. LiveDrop provides secure, patented offline data sharing solutions across mobile and desktop platforms. (more)
🤝 Mergers & Acquisitions
Predibase, from San Francisco 🇺🇸 was acquired by Rubrik. Predibase provides the first platform for reinforcement fine-tuning, enabling AI teams to easily customise and serve any open-source LLM in the cloud without labeled data. (more)
Invariant Labs, from Zurich 🇨🇭 was acquired by Snyk. Invariant Labs focuses on making AI Agents secure and reliable. (more)
⭐️ Trending GitHub Repositories
microsoft / edit (✩ 2,319 stars this week) - A simple editor for simple needs.
patchy631 / ai-engineering-hub (✩ 2,260 stars this week) - In-depth tutorials on LLMs, RAGs and real-world AI agent applications.
twentyhq / twenty 🇫🇷 (✩ 1,570 stars this week) - Building a modern alternative to Salesforce, powered by the community.
👍 Trending Developer Tools on ProductHunt
Twenty 🇫🇷 (👍 969) - Twenty is a modern, open-source CRM alternative to Salesforce—fully customizable, affordable, and powered by the community.
FlashDocs API (👍 701) - FlashDocs lets you generate Google Slides and PowerPoint decks from your product, using just one API call. Markdown, charts, images, tables, merge tags, brand themes, all handled. Build it once, export stunning decks everywhere.
Pythagora 2.0 (👍 701) - Pythagora enables complete AI development from planning to deployment. While others stop at code generation, we embrace the messy reality of software. Build full-stack applications that survive real users, then deploy anywhere - all from one platform.