For decades, IT services companies have made billions of dollars by allowing companies to outsource technology tasks such as customizing, integrating and maintaining enterprise software. Vishal Sikka, former CEO of Infosys, one of the largest such companies in India, is now betting that artificial intelligence can do much of that work.
His new startup, Hang Ten Systemsraised a $32 million round led by Mayfield, he said on Wednesdaywith strategic investment from Aramco Ventures and participation from angel investors. The startup, whose board includes Yahoo co-founder Jerry Yang, said it helps businesses continuously build, modify and operate software using AI-driven development and automation.
Hang Ten is entering a market where IT services companies, including Infosys, are struggling to adapt to artificial intelligence through partnerships with companies such as Anthropic and OpenAI.
The startup’s launch comes amid a growing debate over whether artificial intelligence will expand the industry’s addressable market or fundamentally change the way enterprise software is built, maintained and delivered.
Clearly, some businesses are eager to test the idea of AI services, especially from someone as experienced as Sikka, who spent 12 years building enterprise software at SAP and later as a board member at Oracle. Mayfield CEO Navin Chaddha told TechCrunch that the company “just launched a month ago” and already has customers.
The startup said it is working with customers including Siemens Gamesa Renewable Energy and Fresenius to deliver native AI projects. In separate blog post Announcing the venture, Sikka, 59, said Hang Ten was already helping big businesses “hang ten on the biggest wave of our lives”.
Based in the Bay Area, Hang Ten told TechCrunch that it is hiring in delivery, engineering, sales and leadership roles and plans to expand to multiple locations worldwide to meet business demand.
The startup’s first crew includes executives who have worked with Sikka for years across SAP, Infosys and his previous AI business. VianAIaccording to their LinkedIn profiles. Among them are co-founders Navin Budhiraja, CTO of the startup. Sanjay Rajagopalan, Chief Design Officer of and Tao Liu, its senior vice president of future development engineering.
After stepping down as CEO of Infosys in 2017, Sikka founded VianAI, which emerged from stealth in 2019 with $50 million in seed funding and later raised $140 million in a 2021 round led by SoftBank Vision Fund 2.
Chaddha told TechCrunch that Hang Ten is different from VianAI, describing Sikka’s previous venture as focused on a different market. VianAI focused on enterprise AI applications and analytics tools designed to help businesses use AI in decision making. Hang Ten, in contrast, describes itself as an enterprise AI services company built around agent code generation, reusable AI skills and domain expertise.
Mayfield backed Hang Ten because of Sikka’s career experience, as well as her belief that the startup’s inherent model can scale differently than traditional service companies.
“Traditional services scale linearly with the number of employees,” Mayfield said. “Hang Ten is built so that leverage increases with each project.”
The Hang Ten comes as investors discuss how artificial intelligence will affect the economics of the IT services industry. Analysts at Jefferies he argued earlier this year that IT services may be among the first sectors to experience significant AI disruption. Infosys chairman Nandan Nilekani, however, this week he said AI could expand the industry’s addressable market.
Infosys itself has sought to position AI as an opportunity rather than a threat, telling investors this month that “AI-first services” could they represent a $300 billion to $400 billion market to 2030. The talk comes as investors are reassessing the outlook for traditional IT services companies, with Infosys shares down more than 35% this year.
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