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We’re delighted to have co-led Qodo’s Series A round with Susa Ventures, and with participation from Firestreak Ventures, ICON Continuity Fund, and Seed investors TLV Partners and Vine Ventures.
LLMs are completely reshaping software development. Developers will either become 10x more efficient and capable with AI agents coding, testing and publishing code for them, or AI will become so good at coding that devs will become obsolete altogether. Either way, at the rate things are changing right now, in a couple of years coding will look very different. Most developers already use code assistants and young developers are starting out as AI-native and code differently to their 29-year “old” colleagues.
Qodo (formerly CodiumAI) is a gen-AI company that wants to become a key enabler of this transformation - helping developers create high-quality software much faster. The company started as a unit test generation tool aiming to liberate devs from the time-consuming, tedious aspects of code testing. Qodo quickly expanded to a suite of LLM-based dev tools designed to automate and enrich various facets of software development, with a focus on code integrity - reducing bugs and issues. Qodo’s thesis is that by solving testing first they get a strong foundation for the rest and can make the entire process more efficient.
The right team to take on this challenge
We’re excited to partner with Qodo and its Co-founders, Itamar Friedman (CEO) and Dedy Kredo (CPO). Longtime friends and collaborators, both Itamar and Dedy are domain experts and well respected in their fields. As developers themselves, they have a deep understanding of the pain points developers encounter and how AI can alleviate some of their manual, repetitive and time-consuming tasks.
Itamar is highly regarded in the broader AI community, with many citing his research work. After selling his previous AI company, Visualead, to Alibaba, he went on to successfully run their Israeli machine learning research and development centre for four years. Dedy has previously held a number of senior product roles at VMware and Explorium, including leading product management and marketing for a B2C data analytics startup he co-founded.
Itamar and Dedy have attracted strong technical talent to help build Qodo and achieve its mission. Their team includes former executives from Microsoft, Spotify, Snyk, Forter and our portfolio company Deci, which was recently acquired by Nvidia.
Strong traction right out of the gate
Since its founding in June 2022, Qodo released three open-source code-assisting agents to the market, which have been downloaded ~1m times and are consistently growing in popularity. Qodo Cover (released Mar ‘23) is an IDE plugin that generates test suits; Qodo Merge (released Sept '23) an AI Agent that generates excellent Pull Requests across platforms; and Qodo Gen (released on April ‘24) is a LLM-based code-generation tool that embodies Qodo’s test-driven systematic approach that boosts both productivity and, importantly, fewer issues and bugs in their code.
Developers at hundreds of organisations use these popular free products, and Qodo has recently started monetising them (Dec ‘23). It’s a Product Led Sales (PLS) motion, where devs freely install and interact with their product and upgrade based on tier and features. There are two revenue streams: self-serve paid version (“Teams”) (devs entering credit card) and enterprise deals with larger orgs. Qodo has quickly gained strong enterprise traction with thousands of teams using its solution worldwide, including industry leaders from multiple Fortune 100 companies.
Investing in a highly competitive environment
A key risk in investing in Qodo is that it is playing in a particularly crowded field, against both strong startups and well positioned incumbents, particularly Microsoft Copilot, the popular AI coding assistant. Many developers who want to leverage LLMs also use ChatGPT directly. But we chose to invest in Qodo acknowledging these risks - we are backing an exceptional team with a clear strategy of climbing the mountain from a differentiated direction - from testing to the entire development cycle, with a focus on code integrity. We believe that this strategy has the potential to create a product that a large enough set of customers will prefer, giving it a meaningful market share. Giant dev infrastructure markets often end up with three (or more) multi-billion dollar winners, as we’ve seen with cloud, developer repositories, observability and others. Code generation is huge, sees interest from many capable players and is also likely to have multiple big winners.
What’s next for Qodo?
With this latest fundraising round, Qodo plans to further expand its product offering to support enterprise and mid-market customers, deepen its research and development, and grow its sales team to meet the increasing inbound demand.
We’re excited by Qodo’s vision for how software can be developed in a future powered by rapid developments in artificial and human intelligence, in which developers can build faster with zero bugs.
We’re delighted to welcome you to Square Peg, Itamar, Dedy and the Qodo Team!
