Back to Reviews

Lessons from Lovable: Pricing for AI

Live Event•Elena Verna•Dec 10, 2025
LovablePricingElena

Company Overview & Growth Trajectory

  • Lovable: AI-powered app building platform, launched November 2023
  • Explosive growth: $200M ARR after 1 year, 2 weeks post-launch
    • Took 8 months to reach $100M ARR
    • Only 4 months to double from $100M to $200M
  • Team size: 100 people at $200M revenue (high revenue per employee)
  • Still considers themselves in “product-market fit treadmill” despite revenue scale
    • Technology changing rapidly
    • Customer expectations evolving in weeks, not years
    • High competition environment

    • Current Pricing Model Structure

  • Four tiers: Freemium → Pro ($25) → Business ($40, reducing to $40) → Enterprise
  • Credit-based system with monthly allocations:
    • Freemium: 5 credits daily, 30 total per month
    • Pro: 100 credits/month (can upgrade to 200 or 500)
    • Business/Enterprise: Volume pricing with additional features
  • Key differentiators by tier:
    • Custom domain publishing (Pro+)
    • Remove Lovable branding (Pro+)
    • Roles & permissions (Business+)
    • SSO & data opt-out (Business+)

    • Credit System Philosophy & Challenges

  • Credits primary upgrade trigger, not features
  • Acknowledged customer pain points:
    • Unpredictable costs per action
    • Cannot compare pricing across competitors
    • Mental model mismatch between expected vs. actual credit consumption
  • Credit rollover policy: One month forward only, expires if unused
    • Retention tactic: lose rollover balance if churned
  • Exploring alternatives:
    • Top-up purchases (testing in January)
    • Potential “Lovable wallet” with direct dollar spend
    • May move away from credits long-term if LLM costs decrease

    • Strategic Pricing Decisions

  • Removed per-user pricing to unlock collaboration
    • Migrated team plan users from $40 to $25/month
    • Took $4M revenue hit but improved retention and collaboration 10x
  • Freemium as marketing expense, not cost center
    • Gives away credits for hackathons, education, nonprofits
    • Lovable badge on free apps drives viral growth
  • Focus on engagement over revenue optimization
    • Goal: maximize paid users, not ARPU
    • Constantly exploring how to make product cheaper
  • Daily 5 credits on top of monthly allocation
    • Drives habitual usage even when monthly credits exhausted
    • “Ingenious growth hack” maintaining user engagement

    • Enterprise & Market Expansion

  • Enterprise plan launched 4 months ago due to market pull
  • Business plan mirrors enterprise features minus services/contracting
  • Self-serve to enterprise motion: all enterprise clients start with self-serve validation
  • Regional pricing testing: $5 entry point for India, Brazil, Indonesia (January)
  • Credit allocation sophistication: exploring individual vs. pooled credits for teams

    • Experimentation & Future Outlook

  • Monthly pricing changes normalized with customer base
  • Always test on new users first, then migrate existing users
  • Take revenue hits for user-friendly changes (e.g., price reductions, feature unlocks)
  • Next 12-24 months: Industry moving away from pass-through LLM pricing
  • Credits likely interim solution until LLM costs decrease significantly
  • AI companies forced to optimize pricing much earlier (Year 1 vs. traditional 5 years)

    • Chat with meeting transcript: https://notes.granola.ai/t/11339b42-7a18-43b9-a25f-f2079ab9d6bc