For many decades, IT services companies have generated substantial revenue by assisting businesses in outsourcing technology tasks such as the customization, integration, and maintenance of enterprise software. Vishal Sikka, the former CEO of Infosys, one of India's preeminent firms in this sector, is now placing his bet on artificial intelligence to perform a significant portion of these functions.
His latest venture, Hang Ten Systems, announced on Wednesday that it has successfully secured a $32 million seed funding round. This round was led by Mayfield, with a strategic investment from Aramco Ventures and additional participation from angel investors. The startup, which counts Yahoo co-founder Jerry Yang among its board members, aims to empower enterprises to continuously build, modify, and operate software through AI-driven development and automation.
Hang Ten enters a dynamic market landscape where established IT services powerhouses, including Sikka's former company Infosys, are actively pursuing AI adoption, often through strategic alliances with leading AI innovators like Anthropic and OpenAI.
The launch of this new startup coincides with an intensifying industry discussion regarding whether AI will expand the overall market for IT services or fundamentally transform the methodologies for developing, maintaining, and delivering enterprise software.
Evidently, some enterprises are keen to explore this AI-centric services model, particularly when spearheaded by an individual of Sikka's caliber and experience, who previously dedicated 12 years to building enterprise software at SAP and later served on Oracle's board. Navin Chaddha, Managing Partner at Mayfield, informed TechCrunch that despite being "just got started a month back," the company has already onboarded customers.
Hang Ten has confirmed its engagement with clients such as Siemens Gamesa Renewable Energy and Fresenius for AI-native project delivery. In a separate blog post announcing the new initiative, Sikka, 59, expressed that Hang Ten is already assisting large enterprises to "hang ten on the biggest wave of our lifetimes."
Headquartered in the Bay Area, Hang Ten communicated to TechCrunch its active recruitment across delivery, engineering, sales, and leadership roles, with plans for global expansion into multiple locations to address enterprise demand.
The startup's foundational team comprises executives who have collaborated with Sikka for years across his tenures at SAP, Infosys, and his previous enterprise AI startup, VianAI, as evidenced by their LinkedIn profiles. Key members include co-founders Navin Budhiraja, the CTO; Sanjay Rajagopalan, the chief design officer; and Tao Liu, the senior vice president of forward deployed engineering.
Following his departure as Infosys' chief executive in 2017, Sikka established VianAI. This venture emerged from stealth in 2019 with $50 million in seed funding and subsequently raised an additional $140 million in a 2021 funding round led by SoftBank Vision Fund 2.
Chaddha clarified to TechCrunch that Hang Ten is distinct from VianAI, noting that Sikka’s earlier company focused on a different market segment. VianAI specialized in enterprise AI applications and analytics tools designed to assist businesses in leveraging artificial intelligence for decision-making. Hang Ten, conversely, positions itself as an enterprise AI services provider centered on agentic code generation, reusable AI skills, and deep domain expertise.
Mayfield's decision to back Hang Ten was driven by Sikka's extensive career experience, coupled with the firm's conviction that the startup's AI-native model offers a unique scaling advantage compared to traditional services firms.
"Traditional services scale linearly with headcount," Mayfield stated. "Hang Ten is built so its leverage grows with every project."
Hang Ten's emergence occurs amidst ongoing investor discussions concerning AI's potential impact on the economics of the IT services industry. Analysts at Jefferies earlier this year posited that IT services might be among the first sectors to experience significant AI disruption. However, Infosys chairman Nandan Nilekani recently countered this view, suggesting that AI could, in fact, expand the industry's total addressable market.
Infosys itself has actively sought to frame AI as an opportunity rather than a threat, informing investors this month that "AI-first services" could represent a market valued between $300 billion and $400 billion by 2030. This broader debate unfolds as investors reassess the future prospects for traditional IT services firms, with Infosys shares having declined over 35% this year.
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