He Raised $93 Million To Build A Free-To-Use AI-Powered Toolkit For Developers

From humble beginnings in Sunnyvale to leading a groundbreaking AI company, Varun Mohan’s journey is a testament to resilience, innovation, and a relentless pursuit of impactful solutions.

In this interview, Varun shares his story, insights on the evolution of technology, and the strategic pivots that led him from autonomous vehicles to the creation of Codeium, an AI code acceleration tool transforming the software development landscape.

Listen to the full podcast episode and review the transcript here.

Early Beginnings and a Passion for Math

Varun Mohan was born to Indian immigrant parents in Sunnyvale, California. Growing up in the Bay Area, he developed a keen interest in mathematics, participating in math and computing Olympiads throughout his school years.

This competitive spirit and love for problem-solving were foundational in shaping his career. Varun notes wryly that his teammates at Codeium competed against each other in middle and high school.

His time at MIT was pivotal, forming connections that would later prove crucial in his entrepreneurial journey.

“I was drawn to the objectivity of math. You can’t BS your way through it,” Varun recalls. In seventh grade, he competed in the USAML, which selects the top 250 kids in the nation. He participated in a contest that ran over two days with four and a half hours for each.

Varun solved six problems and scored one out of 42, which was the median score. The challenge of solving complex problems, even if it meant not solving them at all, was incredibly appealing. In Varun’s mind, the experience of solving hard problems gave him a level of courage.

From Autonomous Vehicles to AI Pioneering

Varun remembers how he wanted to work toward where the future of robotics and autonomy would ultimately end up going. After graduating from MIT, he joined Nuro, an autonomous vehicle company, as one of the first 15 engineers and ended up being a manager of a team.

Varun’s role involved managing large-scale deep learning infrastructure, but he yearned to build a product that had an immediate, scalable impact. “My dream wasn’t just to manage people; it was to build a product used at a massive scale,” Varun explains.

The slow timelines in the autonomous vehicle industry prompted him to seek a venture where he could make a tangible difference sooner. Despite their success, they realized that the advent of transformer models and generative AI presented new opportunities.

Building Codeium, a GPU Virtualization Company

Varun and his co-founder Douglas Chen, whom he had known since middle school, decided to venture into building a GPU virtualization company. They built software to make GPU applications run significantly more efficiently.

You could take applications that would previously run on GPUs and run them on computers and regular CPUs. They would transparently offload the computations to remote machines. That’s how they could optimize some workloads by 5x to 10x.

This was a huge improvement, especially in 2021, when GPU supply was under shortage. During COVID, Varun worked with his team of 8 people, and they made between $2M and $3M in revenues.

At its peak, Varun and his team were managing upwards of 10,000 GPUs for a handful of companies, which actually accounted for 20% of GCP Google Cloud Platform’s GPU inference capacity in multiple data centers.

“In mid-2022, we saw the rise of transformers in generative models and realized that everyone would soon be running this type of model architecture,” Varun notes. “We decided to pivot and build what is now Codeium.”

This was before the era of ChatGPT and Varun wanted to usher in a brand new set of applications to allow everyone to “run transformers.”

The Evolution of Codeium

At that time, Varun had no clue about how to scale the company and boost revenues. Nor did they ever hire a sales rep, which Varun realizes was a huge advantage that allowed them to pivot.

Soon, they were earning more revenue than most companies that raised more money than they did in the 0% interest rate environment of 2021. However, Varun realized that he didn’t want to compare with other ML infra or ML ops companies but wanted the company to realize its maximum potential.

Varun had big dreams for Codeium and wanted it to make billions of dollars in revenue each year. They could either die a slow but certain death, die with a non-trivial chance, or succeed for a massive reward. Or die significantly faster.

By the time Varun was ready to make drastic changes in the company, they had already raised around $20M from investors.

It was now time to communicate with them and ensure they were up to date with the new developments. Thankfully, they did not oppose Varun’s decision to move forward in the new direction.

Codeium Today and the Path Forward

Codeium started as a GPU virtualization company but transformed into an AI code acceleration tool as Varun and his team recognized the potential of generative AI.

They built a tool that significantly enhances developer productivity, processing over 100 billion tokens of code daily, which is over 10 billion lines of code, serving more than 600,000 developers worldwide.

This is a significant leap forward from the less than one thousand users they had at the beginning of 2023. Codeium is now one of the top five largest Intervia apps in the world.

Varun reveals how they train their own models and run them at a massive scale in-house. That’s where one of their biggest advantages lies.

Codeium’s impact is evident as over 700 enterprises, including 34 to 500, utilize their product internally.

What Makes Codeium So Successful

As Varun explains, there are two main reasons why enterprises want to use the product. Firstly, Codeium supports all the places where their developers are: on every ID and in every single language that the users can write.

It provides self-hosting capabilities when necessary, which is a benefit since a lot of companies don’t want to send their code outside of the company.

And because Codeium trains its own models, they can deploy it entirely within their own environment so the code never leaks. This is crucial for some of the largest companies since code is their most critical IP.

The second advantage is that Codeium works on every source code management tool. The big competitor in this space is a product called GitHub Copilot, which is owned by Microsoft. And it’s a massive product.

However, Codeium is compatible with GitHub, GitLab, Bitbucket, and many different source code management tools. Varin gives them a personalized experience, which means that, at Codeium, they actually tailor-make the suggestions to the private code that lives inside the company.

Varun found that a lot of companies noticed that their new developers were onboarded onto codebases in four to six weeks instead of four to six months now. That’s because the Codeium system deeply understands the software that exists inside the company.

Companies have also noticed that over 45% of all software that is getting committed is generated by Codeium. The company supports various IDEs languages and provides self-hosting capabilities, ensuring code never leaves the company’s environment.

Fundraising and Strategic Pivots

Raising capital for Codeium was a strategic endeavor. Despite initial revenue success, Varun realized the need for a larger vision to attract substantial investment. Codeium raised $93M to date, with strategic investors like Kleiner Perkins, a highly reputed venture capital firm.

“By the time we raised our Series B, we had barely spent our seed round,” Varun shares. “We built a product that scaled massively before seeking additional funds. This approach ensured we had a compelling story for investors.”

Varun emphasizes the importance of being good stewards of capital and making data-driven decisions. “We never spend millions unless we see a clear ROI. Our goal is to operate in a way where we could be cashflow positive if necessary.”

Varun believes in building and scaling their product and ensuring that it has a massive number of users and a lot of large enterprises start to use the product. Companies like Dell, which currently has 40,000 developers, are starting to use the product.

As Varun reveals, fundraising has been fairly easy for Codeium because it has been getting preempted by folks who were particularly interested in the company’s progress and its proof points.

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Varun’s Vision for Codeium

Varun reveals that Codeium provides 10x more leverage to developers, who can generate code 10x faster, deploy code 10x faster, or debug, test, review, and navigate code 10x faster.

He envisions a time when Nvidia wants to do something very challenging, like building the X100, which is their newest chip. If that chip takes 12 months. Varin would want the time it takes for that chip to get built to go down from 12 months to one month with Codeium.

As Varun opines, we underestimate what is possible over a long time horizon but overestimate what is possible over a short time horizon. He believes we will still be developers writing code inside applications in the next couple of years.

But the amount of work it takes for them to write boilerplate applications, to do tasks like migrations, to do tasks like refactors, is going to go down tremendously.

Varun quotes a principle in computer science called Anda’s Law, which says that if you take many steps of a process and make one step faster, there’s a limit to how much that makes everything faster.

For instance, in a world where 100 units of time and 30 units of time are spent writing software, If all we do is make the 30 units of time writing software 10 times faster, we only reduce the total amount of time spent from 100 to 73.

The game changer is how you reduce the remaining 70 units by a factor of 10.

Varun thinks it will be a gradual or incremental process to continue to shave down time from every single aspect of this process. Even today, if you could write code instantly, the time it takes to review code will become a bottleneck.

The time it takes to deploy code will also become a bottleneck. People are not willing to ultimately deploy arbitrary software that an ML or AI system generates into production without any review.

Leadership and Team Building

At present, Codeium has around 50 employees and is heavy on the technical side. It has incredible engineers, and Varun concedes that hiring and retaining them is a challenging process. Transitioning from an engineer to a CEO was a significant shift.

He underscores the importance of resilience, mission orientation, and high accountability in building a strong team. “We look for people who are incredibly mission-oriented and resilient. Our technical bar is one of the highest in Silicon Valley.”

Varun also highlights the necessity of humility and a relentless focus on providing value. He says that having a company is a humbling experience. Milestones like fundraising or building a technical product don’t mean much if you’re not providing value.

Focus ruthlessly on providing value, and the rest will figure itself out; that’s Varun’s mantra.

As he says, “If we are able to do that, we will capture a lot of value at that point, but the sheer amount of value we will be able to generate is going to be so massive. That would be the true north star for a company.”

Varun’s Advice for Aspiring Founders

Varun advises entrepreneurs that founding companies requires a deep amount of humility because the first idea you will have when you start a company is very unlikely to be the right one.

You’ll need to change directions and constantly assume you were wrong. The hardest part about a startup is that you need to operate with two modes in your head and be irrationally optimistic to execute a critical vision faster.

Because a big company has more people, more capital, and more distribution, you also have to be uncompromisingly realistic. And that requires a tremendous amount of humility and a truth-seeking nature for the company.

Looking Ahead

As Varun continues to lead Codeium, his vision remains focused on leveraging AI to transform software development. He believes that while developers will still write code in the near future, the efficiency and speed of doing so will drastically improve.

We’re far from a world where AI-generated software can be deployed without review, but incremental improvements will continuously push the boundaries.

Varun’s journey from Sunnyvale to the forefront of AI innovation is a compelling narrative of resilience, strategic pivots, and an unwavering commitment to impactful solutions.

As Codeium continues to grow, it stands as a testament to what’s possible when visionary leadership meets cutting-edge technology.

Listen to the full podcast transcript to know more, including:

• Varun Mohan, co-founder of Codeium, emphasizes the importance of resilience, mission orientation, and accountability in building a successful startup team.
• Codeium pivoted from a GPU virtualization company to an AI code acceleration tool, now serving over 600,000 developers and 700 enterprises.
• The company’s rapid growth and success are attributed to its focus on providing tangible value and leveraging internal talent to solve problems before hiring specialists.
• Codeium’s technology aims to significantly reduce the time developers spend on repetitive tasks, thus increasing their overall productivity.
• Varun stresses the importance of humility and truth-seeking in navigating the uncertainties and challenges of startup life.
• The company has raised $93M to date, with a strong emphasis on responsible capital management and avoiding unnecessary expenditures.
• Varun’s transition from engineer to CEO involved learning to effectively communicate business value and building a robust go-to-market strategy alongside technological innovation.

 

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