For decades, IT services companies have made billions of dollars by allowing companies to outsource technical tasks such as customizing, integrating and maintaining enterprise software. Vishal Sikka, former CEO of Infosys, one of India’s largest companies, is now confident that AI can take over much of that work.
His fledgling startup, Hang Ten Systems, said Wednesday it has raised a $32 million seed round led by Mayfield, with a strategic investment from Aramco Ventures and participation from angel investors. The startup, which counts Yahoo co-founder Jerry Yang on its board, said it helps businesses build, modify and operate software on an ongoing basis using AI-based development and automation.
Hangten has entered the market where IT service companies, including Infosys, are competing to adapt to AI through partnerships with companies such as Anthropic and OpenAI.
The startup’s launch comes amid a growing debate over whether AI will expand the industry’s market or fundamentally change how enterprise software is built, maintained and delivered.
Clearly, some companies want to try the AI service idea. This is especially the case for someone with experience like Sikka, who spent 12 years building enterprise software at SAP and later served as a board member at Oracle. Mayfield managing partner 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 AI-based projects. In a separate blog post announcing the venture, Sikka, 59, said he was already helping large companies “bet 10 of the biggest waves of our lifetimes.”
Bay Area-based Hang Ten told TechCrunch it is hiring across delivery, engineering, sales and leadership and plans to expand into multiple locations around the world to meet enterprise demand.
According to his LinkedIn profile, the startup’s early employees include executives who worked with Sikka for years at SAP, Infosys, and his previous enterprise AI startup, VianAI. Among them is co-founder Navin Budhiraja, the startup’s CTO. Sanjay Rajagopalan, Chief Design Officer; and Tao Liu, Senior Vice President of Forward Deployment Engineering.
Sikka founded VianAI after stepping down as CEO of Infosys in 2017. VianAI came out of hiding in 2019 by raising $50 million in seed funding and has since raised $140 million in a 2021 round led by SoftBank Vision Fund 2.
Chaddha told TechCrunch Hang Ten is distinct from VianAI, explaining that Sikka’s initial venture is focused on a different market. VianAI focuses on enterprise AI applications and analytics tools designed to help businesses use artificial intelligence in decision-making. In contrast, Hang Ten describes itself as an enterprise AI services company built on agent code generation, reusable AI technology, and domain expertise.
Mayfield supported Hang Ten because of Sikka’s career experience and belief that the startup’s AI-based model could scale differently than traditional service companies.
“Existing services scale linearly with headcount,” Mayfield said. “Hang Ten is built to increase impact on every project.”
Hang Ten emerged as investors debate how AI will impact the economics of the IT services industry. Analysts at Jefferies argued earlier this year that IT services could be one of the first sectors to face meaningful AI disruption. But Infosys Chairman Nandan Nilekani said this week that AI could expand the industry’s market.
Infosys itself has tried to position AI as an opportunity rather than a threat, telling investors this month that “AI-first services” could represent a $300 billion to $400 billion market by 2030. Infosys shares have fallen more than 35% this year, sparking a debate as investors reassess the outlook for the traditional IT services company.
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