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Although transformers dominate many code-specific tasks, they have significant limitations. This paper explores State Space Models (SSMs) as a promising alternative for code understanding tasks such as retrieval, classification, and clone detection. We introduce CodeSSM, the first SSM-based model trained on code corpora to assess its effectiveness. Our results demonstrate that SSMs are more sample-efficient and can extrapolate to longer contexts beyond the pretraining length. Extensive experiments show that SSMs offer a viable alternative to transformers, addressing several their limitations. Additionally, CodeSSM reduces memory usage by up to 64% compared to transformers at a context length of 2048, with greater savings as context length grows.The code is available [here](https://github.com/abx04/CodeSSM).