Lovable hits $6.6B valuation as AI funding splits between winners and write-offs

CNBC reported the round on 16 December. US venture firm Accel led it, with Khosla Ventures joining, according to the sources. Accel had already backed Lovable's previous round. None of the three companies had responded to CNBC's request for comment when the article was published.

That is a fast step up. Lovable closed a $200 million round in July at a $1.8 billion valuation. Forbes reported in November that the new round would value the company at "around" $6 billion. The final figure came in higher.

What the money is buying

Lovable was founded in 2023 and is based in Stockholm. Its platform turns text prompts into apps and websites, drawing on models from providers including OpenAI and Anthropic, so users do not need to write code themselves. The company reported $200 million in annual recurring revenue in November, less than a year after it first hit $1 million in ARR. At the time, it said 100,000 projects were being built on the platform every day. It is opening offices in Boston and San Francisco.

This is the third round Lovable has raised in 2025, and it makes the company one of Europe's most valuable startups. The broader vibe coding category has drawn heavy investor interest this year. In the US, Anysphere, which makes the coding tool Cursor, raised $2.3 billion at a $29.3 billion valuation in November. Replit reached a $3 billion price tag in September after picking up $250 million, and Vercel closed a $300 million round at a $9.3 billion valuation.

"Venture capital flows reflected a shift from volume to intention," HolonIQ wrote in a 6 February post, looking back at 2025.

Not every corner of the market is moving in the same direction. Edtech is the clearest counterexample. Global edtech investment peaked at $16.7 billion in 2021, according to Tracxn, a Bengaluru-based platform that tracks startup funding, then fell to less than $3 billion by 2025. The number of new edtech companies launched dropped from almost 10,500 in 2020 to 645 in 2025.

The reasons are not mysterious. For-profit education startups struggled to differentiate themselves from rivals and to fix weak unit economics, according to an analysis by Loot Drop, a database of more than 1,700 startup closures. High customer acquisition costs, long institutional sales cycles and low retention rates tied to murky learning outcomes all weighed on the sector. Byju's, once the world's most valuable education startup at $22 billion, collapsed under a financial crisis and aggressive sales tactics for expensive courses. Nigerian startup Edukoya shut down in 2025. In China, the government's "double reduction" policy in July 2021 ended the K-12 online tutoring business almost overnight; Yuanfudao, once valued at $15.5 billion, pivoted to AI learning hardware.

Where the money went instead

HolonIQ's February analysis found capital concentrating in AI-enabled products, workforce-aligned platforms and K-12 operations tools that address cost or staffing pressure. Corporate workforce development and professional certification prep, the firm argued, look more promising than general K-12 education. The category that gets funded is the one that can show a buyer and a budget line.

There is a second, less comfortable side to the AI funding wave, and it is not about valuations. In July, The Register reported that video conferencing startup MeetingTV sued Palo Alto Networks over a threat report published by Koi Security, which Palo Alto had acquired in April. The complaint alleges Koi used a large language model to generate the report, that the model hallucinated findings, and that Koi published them as fact in a 30 December blog. The blog linked MeetingTV's Zoomcorder product to a Chinese criminal operation and a 2.2-million-user campaign, allegations the startup disputes.

MeetingTV founder and CEO Michael Robertson told The Register that Koi never contacted the company before publishing, and that he learned about the report only when security providers began blocking his domains. A Palo Alto Networks spokesperson said the company was aware of the lawsuit, which concerns a report published before the acquisition, and said it expected the dispute to be resolved through the legal process. The blog has since been edited to remove references to Zoomcorder.

Robertson's argument is broader than his own case. "We're on the doorstep of an era where AI will be used to make critical life-altering decisions on people's lives," he told The Register, asking whether those decisions will come with human oversight and due process. The same question applies to the money. A $6.6 billion valuation for a company with $200 million in ARR is a bet that growth continues. Whether the AI funding cycle keeps rewarding that bet, or starts sorting winners from write-offs the way edtech was sorted, is the open question going into 2026.