coderabbit raises $60m, valuing the 2-year-old ai code review startup at $550m 

The Rise of AI-Powered Code Review: CodeRabbit's Success

Harjot Gill, formerly of FluxNinja, observed a noteworthy pattern after his first venture, Netsil, was acquired by Nutanix in 2018. He noticed a shift in how remote engineering teams were operating.

Gill recounted to TechCrunch that his team began utilizing AI code generation tools like GitHub Copilot. This adoption, he foresaw, would inevitably lead to increased challenges during the code review process.

From Observability to Code Review

In early 2023, Gill initiated CodeRabbit, a platform designed for AI-assisted code review. Subsequently, CodeRabbit acquired FlexNinja.

Gill’s initial assessment proved accurate. The increasing use of AI coding assistants, while boosting productivity, often results in code containing errors. This necessitates significant time investment from engineers for debugging and correction.

CodeRabbit addresses this issue by identifying potential errors and offering constructive feedback. The company reports a monthly growth rate of 20% and currently generates over $15 million in annual recurring revenue (ARR).

Securing Series B Funding

The startup’s rapid expansion has attracted investor attention. On Tuesday, CodeRabbit announced a $60 million Series B funding round, establishing a company valuation of $550 million.

This round, bringing the total funding to $88 million, was spearheaded by Scale Venture Partners, with participation from NVentures – Nvidia’s venture capital division – and existing investors like CRV.

Serving a Growing Customer Base

CodeRabbit currently supports a diverse clientele, including companies such as Chegg, Groupon, and Mercury, as well as over 8,000 other businesses.

The platform streamlines the often-tedious task of code review, a process that has become even more demanding with the proliferation of AI-generated code.

Gill explains that CodeRabbit functions much like a collaborative team member, leveraging its understanding of a company’s specific codebase to pinpoint bugs and offer insightful suggestions. He claims that utilizing CodeRabbit can reduce the need for human code reviewers by as much as 50%.

Competition in the AI Code Review Space

The AI code review market is becoming increasingly competitive. Notable rivals include Graphite, which recently secured a $52 million Series B led by Accel, and Greptile, reportedly in discussions for a $30 million Series A round with Benchmark.

While prominent AI coding assistants like Anthropic’s Claude Code and Cursor also incorporate AI-powered code review features, Gill believes that a dedicated, standalone solution will ultimately be preferred by customers.

He asserts that CodeRabbit offers a more comprehensive and technically robust solution compared to bundled offerings.

The validity of this prediction remains to be seen. However, the platform’s current user base demonstrates a clear willingness to subscribe to CodeRabbit at a cost of $30 per month.

The Need for Human Oversight

Despite the growing sophistication of AI code review tools, complete reliance on AI for bug fixes and code quality is not yet advisable. The inherent unreliability of AI-generated code has led to the emergence of a new role within organizations: the "vibe code cleanup specialist."