Swedish AI coding startup Lovable is in talks to raise $300 million at a $13.2 billion post-money valuation, with US-based Menlo Ventures set to lead the round.

The Stockholm-based company, which builds AI tools that generate full-stack applications from natural language prompts, has raised two previous rounds: a $27 million Series A in June and a $53 million Series B in September, giving it a $640 million valuation. Previous investors include Sequoia, Andreessen Horowitz, Lightspeed, GV (Google Ventures), Khosla Ventures and Facebook.

The AI coding startup, founded in 2022, hit $86 million in ARR (annual recurring revenue) last year. A study published in Nature showed the platform helped developers achieve a 97% increase in code output compared to 2023.

Competition heats up in AI coding

Lovable competes in a crowded market of AI coding tools, including Cursor, which raised $60 million at a $400 million valuation in October.

The funding comes as investor appetite remains strong for AI-native tools that can automate software development tasks. Companies in the space have attracted significant venture interest as enterprises seek to accelerate development cycles.

Lovable declined to comment on the fundraising discussions. The company has expanded from its Stockholm base to San Francisco, with engineering teams in both locations and plans to double headcount over the next 12 months.

The round, if completed, would represent one of the largest European AI funding deals this year and cement Lovable's position among the most valuable AI coding platforms globally.