Lovable hits $13.3B valuation; EU takes a stake

Lovable has secured a $400 million funding round at a $13.3 billion valuation, cementing its status as one of Europe’s most valuable startups. The Stockholm-based company, which enables users to build software through natural language descriptions, has seen its valuation more than double since December, when it raised $300 million at $6.6 billion. The Wall Street Journal first reported the round on Wednesday.

The final tally exceeded initial expectations. Reports last week suggested Lovable was negotiating for $300 million at a $13.2 billion valuation, but the company closed the round $100 million above that figure.

Menlo Ventures co-led the investment, with Balderton Capital among the participating backers. Lovable disclosed the details itself. The other co-lead is the Scaleup Europe Fund, and that detail warrants closer examination.

The European Commission now holds a stake

The Scaleup Europe Fund operates as an EU investment vehicle managed by Swedish asset manager EQT. Bloomberg reports that Lovable represents one of its first disclosed investments from a €5 billion pool.

Brussels is not pursuing this for financial returns alone. The fund was created because European startups continue to mature and then relocate.

EQT partner Victor Englesson articulated the concern directly. If companies like Lovable end up predominantly backed by American investors, he noted, the pressure toward “relocating headquarters or listing” in the United States becomes formidable.

This scenario is not theoretical. Nscale, a British-built company, is preparing a US listing rather than a European one.

Anton Osika, Lovable’s chief executive, has previously argued that Europe faces a confidence deficit rather than a talent deficit. The Commission has now backed that assertion with capital.

Balderton Capital, another investor in this round, makes the affirmative case. General partner Daniel Waterhouse has known Osika since the early days of GPT Engineer, the project from which Lovable emerged.

“Lovable is evidence that the most important AI companies can be built right here in Europe,” he said.

The numbers behind the price

Revenue justifies the $13.3 billion figure. The company is projected to reach a run rate near $600 million by the end of this month, nearly triple what it disclosed in December.

Lovable was profitable before this round. It is now investing in product development and growth instead.

The reach metrics exceed the company’s own scale. Co-founder Fabian Hedin reports that more than 60 million projects have been built on the platform, with 1.2 million new ones added weekly.

“Over 900 million monthly visits to what people build,” Hedin wrote. “That’s an order of magnitude more than the reach of lovable itself.”

Three years, two failed launches

Hedin wrote the first line of Lovable’s code three years ago on his birthday. The company then failed to launch its product twice.

“The third time, something clicked,” he wrote. Within a year, employees at half of the Fortune 500 had adopted it.

Osika frames the ambition as infrastructure rather than software. Lovable is building “the business that helps build businesses,” he wrote. Both founders closed with the same sentiment: it remains day zero.

Waterhouse sees the opportunity similarly. The first chapter involved enabling non-coders to build software, and the larger prize lies in “what happens when those millions of users need to run the businesses they’ve built.”

The funding will support headcount and reliability. Lovable plans to expand its workforce by 50% to 450 people this year, grow in Latin America, and add security features.

The customers make the argument

The client roster speaks for itself. Nvidia uses Lovable to create internal tools for team leaders tracking projects, with Adidas, Hearst, and Deutsche Telekom also among the customers.

Zendesk uses it too, which creates an awkward dynamic. Zendesk sells the kind of business software that tools like Lovable are expected to render obsolete.

Investors have a term for this risk, and Atlassian spent a quarter deflecting it. The SaaSpocalypse thesis suggests in-house AI applications will eventually consume the software industry that sells them.

Zendesk remains unconcerned. Senior product director Jorge Luthe said Lovable “can’t provide the level of reliability at scale” required to manage customer requests across multiple channels.

What the round does not address

Lovable’s vulnerability is not growth. It concerns what the generated code actually does once deployed, and the company has been caught on this before.

Its response so far has involved purchasing certification and an insurance policy from Lloyd’s. Osika now promises “secured code by default” on the platform itself.

He also committed to remaining model-independent, routing between whichever models suit a given task. That approach prevents Lovable from becoming dependent on any single lab, which matters when those labs are also competitors.

Everyone is entering this space

Coding represents the one generative AI product businesses reliably pay for, so competition is intense. Anthropic’s Claude Code drew OpenAI and Google into the fray.

The valuations reflect the pressure. Replit reached $9 billion in March, triple its level six months earlier, and Musk’s SpaceX acquired Lovable’s rival Cursor for $60 billion in June.

Menlo partner Matt Murphy signaled conviction through scale. Lovable will be the firm’s largest single investment after Anthropic, which he called “a testament to how bullish we are on Lovable’s outlook.”

Tencent also appears on the cap table alongside Balderton Capital and World Innovation Lab. A Chinese internet giant and the European Commission now fund the same Swedish startup, which demonstrates how desperately everyone wants a position here.

The real test is not the valuation. It is whether Brussels writing cheques actually keeps a company like this in Europe, or simply makes it more attractive to acquire.