A former Infosys executive has a new startup that wants to challenge the world of IT services

For decades, IT services companies have made billions of dollars by allowing companies to outsource technical tasks such as customizing, integrating, and maintaining business software. Vishal Sikka, the former CEO of Infosys, one of the largest such companies in India, is now betting that AI can do much of that work instead.

His new startup, Hang Ten Systems, has raised a $32 million interest led by Mayfield, it said Wednesday, with strategic investment from Aramco Ventures and participation from angel investors. The startup, whose board includes Yahoo founder Jerry Yang, said it helps businesses continuously build, transform, and deploy software using AI-driven development and automation.

Hang Ten is entering a market where IT services firms, including Infosys, are racing to adapt to AI by partnering with companies like Anthropic and OpenAI.

The startup’s launch comes amid a growing debate over whether AI will expand the industry’s addressable market or fundamentally change how enterprise software is built, maintained and delivered.

Obviously, some businesses are eager to try the idea of ​​AI services, especially from someone as experienced as Sikka, who spent 12 years building business software at SAP, and later as a board member of Oracle. Mayfield Managing Partner Navin Chaddha told TechCrunch that the company “just started a month back” and already has customers.

The startup said it is working with clients including Siemens Gamesa Renewable Energy and Fresenius on AI project delivery. In a separate blog post announcing the venture, Sikka, 59, said Hang Ten is already helping big businesses “hang ten in the biggest industry of our lives.”

Headquartered in the Bay Area, Hang Ten told TechCrunch that it is hiring in all areas of deployment, engineering, sales, and leadership and plans to expand globally to meet business needs.

The first group initially includes executives who have worked with Sikka for years across SAP, Infosys and his previous AI venture, VianAI, according to their LinkedIn profiles. Among them are co-founders Navin Budhiraja, the startup’s CTO, Sanjay Rajagopalan, its chief design officer, and Tao Liu, senior vice president of forward deployment engineering.

After stepping down as CEO of Infosys in 2017, Sikka founded VianAI, which emerged from seed funding 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 Hang Ten is different from VianAI, explaining Sikka’s previous business as focusing on a different market. VianAI specializes in business AI applications and analytics tools designed to help businesses use artificial intelligence in decision making. Hang Ten, in contrast, describes itself as an AI services company built around agent code generation, usable AI capabilities, and domain knowledge.

Mayfield backed Hang Ten because of Sikka’s work experience, and the belief that the startup’s AI-first model could grow differently from traditional services firms.

“Traditional services scale with demographics,” Mayfield said. “Hang Ten is built so its power grows with every project.”

The Hang Ten comes as investors debate how AI will affect the economics of the IT services industry. Analysts at Jefferies argued earlier this year that IT services could be among the first sectors to face meaningful AI disruption. Infosys chairman Nandan Nilekani, however, this week said that AI could increase the industry’s market share.

Infosys itself has sought to position AI as an opportunity rather than a threat, telling investors this month that “first AI services” could represent a $300-$400 billion market by 2030. The controversy comes as investors are reassessing the outlook for traditional IT services companies, with Infosys shares down more than 35% this year.