CodeParrot, a Y Combinator-backed AI SaaS startup, officially shut down due to high cash burn and lack of investor follow-up.

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Founded in 2022 by Vedant Agarwala and Royal Jain, the startup aimed to convert Figma designs and screenshots into production-ready code using AI.

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Despite a promising vision, CodeParrot failed to raise funding during Y Combinator Demo Day and struggled to define a consistent product direction

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Over the next year, the team underwent multiple pivots, hiring and subsequently laying off staff as product-market fit remained elusive.

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The final iteration—a Figma-to-code platform powered by large language models—reached only $1,500 MRR before growth stagnated

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Cofounder Vedant Agarwala publicly reflected on the shutdown, emphasizing how startups remain “brutally hard” despite cutting-edge technology.

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The team burned through its $500K seed fund while grappling with unclear goals and limited traction across pivots.

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CodeParrot had initially planned to release an open-source tool by 2024, which ultimately never materialized.

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It is now the second AI SaaS venture to close in recent weeks, following the shutdown of subtl.ai due to similar funding and scale challenges.

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Despite such closures, VC interest in Indian AI startups remains strong, with over 57% of firms actively exploring early-stage opportunities.

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