Stockholm-based vibe-coding platform Lovable is experiencing rapid revenue growth and is implementing a rare approach among U.S. companies: voluntarily guaranteeing an annual 10% salary increase for all employees on their work anniversaries.
In contrast, U.S. employees typically see built-in raises only with unionized contracts, with a 10% increase usually spread across multiple years.
Lovable’s strategy differs from typical stock and profit-sharing plans by providing direct salary raises, bypassing vesting schedules or stock option conversions.
The company, with 146 employees in March and 78 open roles, aims to expand to over 225 staff by year-end. Lovable is growing annual recurring revenue at an impressive rate, reportedly increasing by $100 million in some months. It surpassed $400 million in ARR and projected to hit $1 billion by year-end. The company launched its vibe-coding product in late 2024 and has been expanding ever since.
For many companies, cash is too precious to allocate to permanent salary increases, leading startups to prefer equity compensation, which doesn’t require immediate cash outlay.
This approach marks a shift from the typical corporate scenario where employees must continuously prove their worth for raises and job security, contrasting the grueling startup culture where stock value growth is the primary focus.
Elena Verna, Lovable’s Head of Growth, suggests this method could counteract toxic corporate politics by recognizing employee value without constantly questioning their worth. Founder CEO Anton Osika emphasized on Twitter the importance of retaining valuable employees without them worrying about raises.
This strategy is also a retention tactic to thwart aggressive recruitment from competitors. Ultimately, while Lovable’s growing valuation might make equity more valuable, a 10% cash raise offers certainty. In a landscape of layoffs attributed to AI despite record profits, this approach is refreshing.
Lovable has not yet commented on this development.