For decades, IT services firms have generated billions by enabling companies to outsource critical tech tasks—customizing, integrating, and maintaining enterprise software. Now, Vishal Sikka, the former CEO of Infosys, one of India's largest such firms, is betting that artificial intelligence can perform much of that work more efficiently. His new venture, Hang Ten Systems, officially launched with a $32 million seed round led by Mayfield, with strategic investment from Aramco Ventures and participation from undisclosed angel investors. The startup's board includes Yahoo co-founder Jerry Yang, adding significant industry credibility to the effort.
The Vision: AI-Native IT Services
Hang Ten Systems positions itself as an enterprise AI services company built around three core pillars: agentic code generation, reusable AI skills, and deep domain expertise. The company's mission is to help enterprises continuously build, modify, and operate software using AI-driven automation, reducing reliance on traditional labor-intensive outsourcing models. Sikka, 59, described the opportunity in a blog post as helping large enterprises 'hang ten on the biggest wave of our lifetimes.'
The startup enters a market in flux. Traditional IT services firms, including Infosys, are racing to adapt to AI through partnerships with companies like Anthropic and OpenAI. However, the debate over whether AI will expand the industry's addressable market or fundamentally alter how enterprise software is built and maintained remains unresolved. Analysts at Jefferies argued earlier this year that IT services may be among the first sectors to face meaningful AI disruption. Infosys chairman Nandan Nilekani, however, has expressed optimism that AI could create new opportunities, with Infosys estimating that 'AI-first services' could represent a $300 billion to $400 billion market by 2030.
Sikka's Track Record
Vishal Sikka brings decades of experience to Hang Ten. He spent 12 years at SAP, where he rose to become the company's first non-German board member and helped architect the HANA platform. After leaving SAP in 2014, he became CEO of Infosys, leading the company through a period of digital transformation before stepping down in 2017 amid governance disputes. Following his Infosys tenure, Sikka founded VianAI, an enterprise AI and analytics company that 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. VianAI focused on helping businesses use AI in decision-making, while Hang Ten is squarely aimed at redefining the services layer of enterprise software delivery.
Mayfield managing partner Navin Chaddha, who led the seed round, emphasized the difference between the two ventures. 'Hang Ten is distinct from VianAI,' Chaddha told TechCrunch. 'VianAI focused on enterprise AI applications and analytics tools. Hang Ten is an enterprise AI services company.' Chaddha also noted that the startup 'just got started a month back' and already has paying customers—a testament to Sikka's reputation and the urgency enterprises feel to adopt AI-native approaches.
The Team and Early Traction
Hang Ten's early crew includes executives who have worked with Sikka for years across SAP, Infosys, and VianAI. Co-founders include Navin Budhiraja (CTO), Sanjay Rajagopalan (chief design officer), and Tao Liu (senior vice president of forward deployed engineering). According to their LinkedIn profiles, the team has deep experience in enterprise software, AI, and large-scale system integration. The startup is headquartered in the Bay Area and plans to expand across multiple global locations to meet enterprise demand. It is actively hiring across delivery, engineering, sales, and leadership roles.
Already, Hang Ten is working with customers such as Siemens Gamesa Renewable Energy and Fresenius on AI-native project delivery. These early engagements highlight the startup's ability to apply its platform to real-world challenges, from optimizing renewable energy operations to streamlining healthcare IT. Chaddha described the startup's approach as fundamentally different from traditional services firms. 'Traditional services scale linearly with headcount. Hang Ten is built so its leverage grows with every project,' he said.
Market Implications and Investor Sentiment
The launch of Hang Ten Systems comes amid growing investor reassessment of the IT services sector. Infosys shares have fallen over 35% this year, reflecting concerns that AI could erode the margins of traditional outsourcing models. However, some see AI as a catalyst for new growth. The startup's seed round signals strong confidence in Sikka's vision. Mayfield's investment is particularly notable given the firm's history of backing enterprise and AI companies. The participation of Aramco Ventures also underscores strategic interest from capital-intensive industries seeking to modernize their software delivery.
One of the key differentiators for Hang Ten is its focus on agentic code generation—AI systems that can autonomously write, test, and deploy code. This contrasts with traditional low-code or no-code platforms that still require human oversight. Hang Ten's approach aims to reduce the time and cost of custom software development by orders of magnitude. The company also emphasizes reusable AI skills, meaning that expertise gained from one project can be applied across multiple clients, compounding efficiency gains. Domain expertise remains critical, as the startup focuses on regulated industries like energy and healthcare, where deep understanding of compliance and operational complexities is essential.
The broader implications for the IT services industry are profound. If Hang Ten succeeds, it could force incumbents to accelerate their own AI transformations or risk obsolescence. Infosys, led by Salil Parekh, has already launched its own AI-first services push, but legacy cost structures and client relationships may slow adoption. Meanwhile, competitors like Tata Consultancy Services, Wipro, and HCLTech are all investing in AI partnerships and internal tools. The next few years will likely determine whether AI-native startups or established players dominate the next era of enterprise IT services.
Hang Ten's ability to attract top-tier investors and major customers within weeks of founding suggests that demand for AI-driven IT services is real and urgent. As Sikka and his team scale the company, they will need to navigate challenges such as talent acquisition, quality control, and the risk of AI-generated errors in production systems. But if the startup can deliver on its promise of leverage growth, it may indeed challenge the foundations of a $500 billion industry.
Source: TechCrunch News