Former GitLab CEO raises money for Kilo to compete in crowded AI coding market

Members of the Kilo Code team, including Scott Breitenother, its co-founder and CEO, and Sid Sijbrandij, its co-founder and previously the CEO of GitLab, gather for the startup's all-team gathering in Amsterdam in October 2025.Kilo CodeInvestors are betting there's room for another startup using artificial intelligence to help software engineers write code faster. The difference with Kilo Code is it counts former GitLab CEO Sid Sijbrandij among its founders.On Wednesday, Kilo Code announced $8 million in seed funding, with backing from Breakers, Cota Capital, General Catalyst, Quiet Capital and Tokyo Black.Sijbrandij is a self-taught developer who helped popularize GitLab's tools for source code collaboration, deployment and testing. GitLab went public in 2021 and is valued at more than $6 billion. Sijbrandij stepped down as CEO last year to focus on cancer treatment but continued as board chair.Since then, the technology industry has become obsessed with having large language models write and update software, a practice commonly known in Silicon Valley as vibe coding. OpenAI co-founder Andrej Karpathy is credited with coining the term in February. OpenAI looked at buying AI coding startup Windsurf for around $3 billion, but scrapped the plan before Google hired senior Windsurf employees in a $2.4 billion transaction in July. Rival Cursor announced a $2.3 billion funding round in November at a $29.3 billion valuation.At Microsoft, vibe coding already makes up 30% of the company's code, CEO Satya Nadella said in April. Sijbrandij witnessed the action and became fascinated by what AI could do for software development. In September, an acquaintance introduced him to Scott Breitenother, who started and later sold consultancy Brooklyn Data."I thought we were just kind of having a meet and greet, and then 25 minutes in, Sid's like, 'Hey, can you start next week?'" Breitenother said. Sijbrandij contributed early capital for the startup, which now employs about 34 people across continents. Breitenother is in charge, but he talks with Sijbrandij many times a day. Kilo Code's software plugs in to coding applications such as Cursor and Microsoft's Visual Studio Code. It's the most widely used service for startup OpenRouter's application programming interface that gives developers access to a variety of AI models, including Grok Code Fast 1 from Elon Musk's xAI. Kilo Code has processed more than 3 trillion tokens in the past month, according to OpenRouter. A single token represents about three-quarters of a word.Daniël Langezaal, a software engineer at Dutch e-commerce startup Plug&Pay, said he has used Kilo Code for months after trying products from Anthropic, Cursor and Microsoft, among others. He said he appreciates Kilo Code's support for both premium and affordable models, and he likes that people publicly contribute to the Kilo Code extension under an open-source license.Langezaal has spread the word. About 80% of Plug&Pay's developers now use Kilo Code, he said. It helped save time for one teammate who recently assembled a complex SQL query. "With Kilo, it took him a day," Langezaal said. "If he didn't have access to Kilo, it would have taken him a few days to implement."GitLab, which has been testing a platform for AI agents to perform tasks, is paying attention, and was interested in what Kilo was building."I talked to the board," Sijbrandij said. "We ended up deciding to do it outside of GitLab."GitLab included reference to Kilo in a filing last month. The company said that it paid Kilo $1,000 in exchange for a right of first refusal for 10 business days should the startup receive an acquisition proposal before August 2026. The market is rapidly evolving. Design software company Figma and a slew of startups now offer vibe coding options for less technical people. It's a category Kilo Code won't be ignoring for much longer."We also want to be the place for people just getting started with code," Sijbrandij said. "We are working on an app builder that's more like the Lovable or Bolt experience," he said, referring to two popular startups. Lovable, based in Sweden, announced funding at a $1.8 billion valuation in July.WATCH: Google's vibe-coding play