"In less than three years, Midjourney's ARR went from zero to $200 million. In 20 months, ElevenLabs, a voice AI startup, saw its ARR soar from zero to near $100 million. In three months, vibe coding darling Lovable went from zero to $17 million in ARR, this summer hitting $100 million in ARR. In its first six months, Decagon hit "seven figures" in ARR, the company reported."
""There is all this pressure from companies like Decagon, Cursor, and Cognition that are just crushing it," said one VC. "There's so much pressure to be the company that went from zero to 100 million in X days." All the examples have one thing in common: ARR, or "annual recurring revenue." The metric came to be a favorite of VCs and startups through the software-as-a-service (SaaS) wave starting in the 2000s, when it was widely accepted as a trusted proxy for a stable startup."
VC-backed AI startups are reporting extraordinarily rapid ARR growth, with companies claiming rises from zero to tens or hundreds of millions within months. Examples include Midjourney reaching $200M in under three years, ElevenLabs near $100M in 20 months, Lovable hitting $100M after rapid early gains, Decagon reaching seven-figure ARR in six months, and Cursor achieving $100M ARR in a year. Investors and founders face intense pressure to show immediate revenue growth. ARR has become a dominant benchmark for startup stability, but some founders are labeling speculative or premature income as long-term revenue, stretching traditional accounting definitions.
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