Hang Ten Systems raises $32 million to automate IT services

Hang Ten Systems, a Bay Area-headquartered startup, announced on Wednesday that it has secured a $32 million seed funding round to build an AI-native IT services firm—an industry involving the outsourcing of tech tasks like software customization, integration, and maintenance. The funding round includes backing from:

• Mayfield, which led the seed round
• Aramco Ventures, which participated as a strategic investor

The startup, which includes Yahoo co-founder Jerry Yang on its board, helps enterprises continuously build, modify, and operate software using AI-driven development and automation. To meet enterprise demand, Hang Ten is hiring across delivery, engineering, sales, and leadership, with plans to expand across multiple locations globally.

The startup enters a market where traditional IT services firms are racing to adapt to artificial intelligence. The shift comes amid a broader debate over how AI will affect the economics of the sector. While some analysts argue IT services may face meaningful disruption, others see an expanding market. For instance, Infosys—one of the largest IT services firms in India, where Sikka previously served as CEO before stepping down in 2017—has told investors that AI-first services could represent a $300 billion to $400 billion market by 2030. This transition occurs as investors reassess traditional providers; Infosys shares are down over 35% this year.

Founder Vishal Sikka, 59, brings enterprise software experience to the venture, including 12 years at SAP. Sikka aims to move the industry past its traditional economic constraints. According to lead investor Mayfield, traditional services scale linearly with headcount, but “Hang Ten is built so its leverage grows with every project.” The startup relies on agentic code generation—defined as AI-driven software development using autonomous agents. Hang Ten is already working on AI-native project delivery with customers including Siemens Gamesa Renewable Energy and Fresenius, helping them ride what Sikka described as the largest wave of our lifetimes.

The venture is distinct from Sikka’s previous enterprise AI startup, 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. While VianAI focused on enterprise AI applications and analytics tools to help businesses use artificial intelligence in decision-making, Hang Ten is built specifically as an AI-native services company. Mayfield managing partner Navin Chaddha noted that the company had only started a month prior but already has customers.

Why it matters

Hang Ten Systems aims to challenge traditional IT services firms by using AI to automate software development and maintenance, potentially shifting the industry’s economic model from linear headcount scaling to AI-driven leverage.