a16z finds startups spending on vibe coding

Startups go all in on vibes

Startups aren’t just talking about AI anymore; they’re spending real money on it. a16z’s new report with Mercury shows companies are paying big for tools that let them build software through prompts instead of code.

Vibe coding tools like Replit, Cursor, and Lovable aren’t just buzz; they’re now bank-statement proof of where startup dollars are going. The data shows that these tools are becoming must-haves, not just experiments.

How a16z found the trend

To find where startup AI budgets are going, Andreessen Horowitz teamed up with Mercury, a fintech serving startups. Together, they analyzed transaction data from more than 200,000 customers between June and August.

The goal was simple: track which AI-native companies startups are actually paying for. The results revealed that vibe coding tools are climbing the ranks fast, becoming one of the hottest AI spending categories.

Vibe coding hits the workplace

a16z said vibe coding has moved beyond hobbyists and into offices. Startups are adopting tools that let anyone create software from prompts, not code.

“Vibe coding is no mere consumer trend; it has landed in workplaces,” the report noted. That means non-engineers can now build apps and prototypes, which changes how companies approach software entirely.

The top vibe tools rising

Among all AI-native companies, Replit ranked third in total startup spending, right behind OpenAI and Anthropic. Cursor, Lovable, and Emergent also made the top-50 list of AI apps based on actual payments.

The data confirms that startups aren’t just experimenting, they’re subscribing, upgrading, and relying on these tools for real work. Replit’s strong enterprise traction shows that this isn’t a passing phase but a core shift.

Why it’s called ‘vibe coding’

The phrase “vibe coding” was coined by OpenAI cofounder Andrej Karpathy in February. He described it as “a new kind of coding” where you “fully give in to the vibes” and “forget that the code even exists.”

That idea caught on quickly. It turned from a playful phrase into a marketable skill, especially as AI tools started handling more of the coding process through natural language.

The money follows the momentum

The dollars tell the story.Anysphere, the company behind Cursor, raised $900 million in a Series C round at a $9.9 billion valuation.

Around the same time, Swedish startup Lovable raised $200 million in Series A funding, valued at $1.8 billion.

Investors see vibe coding as the next logical step in AI’s evolution. With this kind of backing, it’s clear the space isn’t just trendy, it’s thriving.

Replit leads the pack

Replit ranked as the third most paid AI-native company by startups using Mercury’s banking system, only behind OpenAI and Anthropic. That’s huge for a coding platform that focuses on accessible AI development.

Cursor landed at No. 6, Lovable at No. 18, and Emergent at No. 48. These rankings show that startups are betting heavily on tools that simplify development and open it to more roles across a company.

Horizontal tools dominate spending

According to a16z, about 60 percent of the top 50 AI-native apps are “horizontal”, usable across many roles and industries. The remaining 40 percent are “vertical,” designed for specific functions like HR or sales.

Vibe coding fits right into the horizontal group. Like Canva and ElevenLabs, these tools let anyone, from engineers to marketers, create something without needing deep technical skills.

AI opens up new roles

AI has blurred the line between creative, coding, and business tools. What used to be reserved for developers or designers is now open to everyone. a16z said AI “has opened up applications in these categories that can be used by people in any role.”

This means a marketer can build an internal dashboard or a designer can prototype an app, no developer required. The roles inside startups are expanding because of AI.

Why startups love it

For early-stage founders, vibe coding means speed and accessibility. It cuts down the time between idea and prototype, letting small teams compete faster. No waiting for full engineering teams to test ideas.

That accessibility matters. For startups with limited budgets or time, vibe coding is the easiest way to turn concepts into working products quickly, which explains why spending is rising fast.

The limits are still real

Despite the hype, vibe coding isn’t flawless. Executives say AI-generated code can be overly long, unreliable, or poorly structured. Redis CEO Rowan Trollope said his company wouldn’t trust AI with its core tech just yet.

So while these tools make building easier, they still require oversight. Speed comes with trade-offs, especially when reliability and scale are on the line.

Will vibe coding fragment?

The a16z report authors said they’re watching to see if vibe coding will “fragment” into platforms built for different types of applications.

Partner Bryan Moore also wondered if one platform will dominate or if we’ll see several big players emerging. The future could split into multiple strong ecosystems, each serving a different style of builder.

Startups bet on flexibility

Startups are drawn to tools that can evolve with them. Whether it’s building a prototype or scaling a product, flexibility drives purchasing decisions.

Vibe coding fits that mindset. It lets teams stay nimble and adjust quickly as projects shift direction. That’s why, even with its current limits, it’s winning both wallets and attention.

Silicon Valley’s newest obsession

Vibe coding has quickly turned from a quirky phrase into Silicon Valley’s latest must-have trend. From top investors to hiring managers, everyone’s talking about it.

And with major funding rounds and real enterprise adoption, it’s hard to argue this is a fad. The energy around vibe coding mirrors the early days of mobile apps and cloud tools, fast, messy, but full of promise.

Can vibe coding really replace a computer science degree? See why this CEO says tech careers are changing for good.

The vibe coding takeaway

Vibe coding isn’t just hype anymore; it’s the next phase of how startups build. The a16z data proves companies are putting real money behind AI tools that make coding optional. That shift could redefine who builds software in the future.

Still, the path ahead isn’t clear. The tools are powerful but imperfect, and the industry hasn’t decided if one platform will lead or if the space will splinter into many. Either way, startups are all in.

Is vibe coding just the next tech craze, or the start of a true coding revolution? If you love seeing where AI meets creativity, drop a like and leave a comment.

What happens when a startup fully commits to vibe coding? See how one Swedish AI company used it to smash every growth record.

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This slideshow was made with AI assistance and human editing.