Supabase eyes over $5B valuation in new funding round amid AI “vibe coding” boom

Supabase, the open-source startup that has become the go-to backend for a new generation of AI-fueled app builders, is reportedly negotiating fresh funding that could push its valuation past $5 billion. The Information reports that the San Francisco-based startup is in talks with investors just five months after closing its last round, a sign of how quickly demand for AI-driven development is accelerating.

Founded in 2020 as an alternative to Google’s Firebase, Supabase built its platform on top of PostgreSQL and turned it into a full-service backend. Developers can plug in authentication, auto-generated APIs, file storage, real-time subscriptions, and vector databases—critical for today’s AI workloads—without locking themselves into a proprietary system. The pitch is simple: “build in a weekend, scale to millions.”

“Supabase, a startup that provides back-end services for ‘vibe coding’ startups, is in talks to raise more money at a valuation of $5 billion or more,” The Information reported.

What has fueled Supabase’s rise is the surge of AI-assisted coding, often described as “vibe coding.” The term refers to a more intuitive, free-flowing way of building applications where developers lean on AI tools to sketch, test, and deploy ideas at speed. Consumer-facing apps like those emerging from Lovable.dev reflect this trend, and Supabase has positioned itself as the infrastructure layer that makes it possible to scale those experiments into real businesses.

Riding the AI wave, Supabase doubles valuation in just five months

The numbers back up its momentum. More than 1.7 million developers use Supabase, with 81,000 GitHub stars showing strong community adoption. It manages over a million databases, with 2,500 new ones spun up daily. Roughly 40% of companies in the most recent Y Combinator batch are building on Supabase, according to the company.

Rivals in the backend-as-a-service market include Firebase, Appwrite, Hasura, and Neon, but Supabase has leaned into open source and enterprise features to stand out. Its offering now stretches into AI infrastructure, such as vector embeddings for machine learning. That’s a timely bet in a market that analysts valued at $5.1 billion in 2023 and expect to hit $23.3 billion by 2032.

On the business side, Supabase has been growing just as aggressively as its community. The company told potential backers it’s now generating an annual recurring revenue run rate of $70 million, up from $20 million a year earlier. Investors have taken notice. In April 2025, it closed a $200 million Series D at a $2 billion valuation, led by Accel with participation from Coatue, Y Combinator, Craft Ventures, and Felicis. That came only seven months after its $80 million Series C, which was led by Peak XV Partners. In total, Supabase has raised nearly $400 million.

Now, just months later, talks are underway that could more than double its valuation. Sources told The Information that offers are already on the table valuing Supabase at $5 billion or higher, though the size of the round and the lead investor have not been disclosed. If the deal closes, Supabase will be stepping into decacorn territory, fueled by its ambition to become the default database and backend for billion-user apps built with AI.

Supabase’s story underscores how quickly open-source projects can evolve into commercial giants when they align with a broader shift—in this case, the AI boom reshaping how software gets made. With vibe coding on the rise, Supabase isn’t just riding the wave; it’s trying to anchor itself as the infrastructure layer behind it.

Supabase Team (Credit: Supabase)