Zed Industries, the company behind the high-performance open-source code editor Zed, has announced the successful closure of a $32 million Series B funding round, led by Sequoia Capital. With this latest raise, the company’s total funding now exceeds $42 million. The fresh capital will be used to accelerate the development of new capabilities designed to enable real-time collaboration between developers and AI agents directly within code.
Driving Contextual and Collaborative Coding in the AI Era
Zed is reimagining the future of software development by creating persistent, contextual conversations directly tied to code. Unlike traditional tools such as Git which facilitate collaboration through commits and branches but leave developers isolated between commits Zed’s platform captures decisions and discussions as they unfold. This is made possible through character-level permalinks powered by conflict-free replicated data types (CRDTs), ensuring every change and conversation is anchored to its precise place in the code.
“We’re building fundamentally better primitives for collaborative coding, which will allow conversations with teammates and agents to take place directly within the IDE,” said Nathan Sobo, CEO and co-founder of Zed. “By durably linking conversations to specific sections of the code via character-level permalinks, we can transform codebases into multi-dimensional sources of context explaining how any line of code came to be.”
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Sonya Huang, Partner at Sequoia Capital, added: “The future of software development is collaboration – both with other humans and AI agents – and Zed is pioneering the infrastructure to make that vision reality. Their approach to contextual coding represents a fundamental shift in how developers will work with AI agents, and we’re excited to support their mission to transform the development experience.”
Built from the Ground Up for AI-Driven Collaboration
While many competitors have forked Microsoft’s VS Code and layered AI features on top, Zed has been engineered from scratch for collaboration. It is built on a Rust codebase and powered by GPUI, a GPU-accelerated UI framework developed by the Zed team. This foundation allows for seamless interaction between human developers and AI agents, offering a faster, more integrated experience.
Since becoming open-source in 2024, Zed has witnessed rapid adoption, with over 1,100 contributors and more than 150,000 active developers engaging with the platform. With its new funding, Zed is poised to further advance its mission of reshaping software development into a deeply collaborative, AI-driven process.
