Wix Founder: Will Base44 Win the Vibe-Coding Wars? | The Truth About the Economics of Vibe-Coding

By 20VC

Categories: VC, Startup

Summary

Wix's $2.8B market cap severely undervalues its $2.1B revenue business and 150M+ ARR Base44 AI product, while CEO Avershai argues SaaS multiples collapsed because markets can't price AI disruption risk—but some SaaS companies like Atlassian and PaloAlto are recovering, suggesting selective repricing is underway.

Key Takeaways

  1. Wix generates $400M annual free cash flow and reinvests $200M+ into Base44, demonstrating profitability-at-scale while betting aggressively on AI—a rare combination in public SaaS where most companies prioritize growth over returns.
  2. Base44 (Wix's AI coding product) grew to 150M+ ARR with public markets assigning it zero value, suggesting investors either don't understand the product category or fear AI commoditization will destroy margins.
  3. CEO sleep schedule (sleep 5-6am, wake 11:30am) creates 4 uninterrupted hours for strategic thinking before meetings start, allowing only high-difficulty problems to escalate—a scheduling arbitrage that improves organizational maturity by forcing decentralized decision-making.
  4. SaaS valuation crisis stems from market inability to price AI risk into DCF models—not uniform sector weakness. Selective recoveries (Atlassian, PaloAlto, CrowdStrike up; Salesforce, ServiceNow, Figma down) indicate repricing based on AI-resilience perception.
  5. Founder conviction matters more than external validation: Avershai emphasizes commitment to chosen path and acknowledges he has chosen this, suggesting founders should optimize for internal clarity rather than market sentiment during downturns.

Related topics

Transcript Excerpt

You're not going to vibe called Shopify no matter how good you are. Today we are trading on others companies news. We're not trading on Wix news. >> It's a tough time for some public company CEOs with the SAS apocalypse. That is more true for this CEO than almost any other. The Wix market cap is about $2.8 billion. They are doing $2.1 billion in revenue. They have base 44 which is now well over 150 million in AR growing incredibly quickly. And quite frankly, the public markets just won't give them a break. And poor Avershai, their CEO, is going through it. We make about $400 million a year in free cash flow. And we invest about 200 and something million into base 44. We all give too much credit for AI and what it can do. If I would be in the university studying today, I would be terrified.…

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