From Cancelation to $1M Seed Funding PearAI’s Wild YC Ride

On the first day of Y Combinator’s winter 2024 batch, PearAI’s launch didn’t go as planned. Just after snapping a photo in front of the YC sign, founders Nang Ang and Duke Pan faced intense backlash online. Their AI code editor got slammed for looking like a copy of an existing open-source project called Continue.

The backlash grew when people noticed that their licensing was off. To make things worse, they had released their product under a weird, ChatGPT-generated license. This did not sit well with the open-source community.

To top it off, Pan’s tweet bragging about leaving his Coinbase job and claiming their tool was ‘already better than Copilot’ made people even angrier. Continue, which also happens to be a YC startup, publicly criticized them. Meanwhile, YC’s CEO Garry Tan defended the young founders.

By the next day, they apologized, switched to a proper open-source license, and gave credit to the original code. Despite this, it was clear that another AI code editor wasn’t going to cut it.

Instead of giving up, they changed direction. They pivoted to building a framework for AI coding tools. This new product aims to let developers use multiple AI coding tools seamlessly, making them feel like a single, integrated platform. The back end helps these tools communicate smoothly, and the front end keeps everything uniform and user-friendly.

Investors liked this new idea. PearAI secured $1 million in seed funding, bringing their total to $1.25 million when you include YC’s standard $375,000 deal. Investors in the round include Goodwater Capital, Orange Fund, Exitfund, Multimodal Ventures, and some unnamed angels.

It’s been a rough journey for PearAI, but this time around, they’re getting more support and less hate.