For decades, IT services firms have made billions by allowing companies to outsource tech tasks—customizing, integrating, and maintaining enterprise software. Vishal Sikka, former CEO of Infosys, one of India’s largest such firms, is now betting that artificial intelligence can do much of that work instead. His new startup, Hang Ten Systems, has raised a $32 million seed round led by Mayfield, with a strategic investment from Aramco Ventures and participation from angel investors. The startup, whose board includes Yahoo co-founder Jerry Yang, aims to help enterprises continuously build, modify, and operate software using AI-driven development and automation.
Hang Ten enters a market where IT services firms, including Infosys, are racing to adapt to AI through partnerships with companies like Anthropic and OpenAI. The launch comes amid a growing debate over whether AI will expand the industry’s addressable market or fundamentally alter how enterprise software is built, maintained, and delivered. Clearly, some enterprises are eager to try the AI-services idea, especially from someone as experienced as Sikka, who spent 12 years building enterprise software at SAP and later served as a board member for Oracle. Mayfield managing partner Navin Chaddha told TechCrunch that the company “just got started a month back” and already has customers.
Sikka’s Background and the Genesis of Hang Ten
Vishal Sikka, 59, stepped down as Infosys’ chief executive in 2017 after a tenure marked by efforts to transform the company into a more innovation-driven organization. Prior to Infosys, he spent over a decade at SAP, where he rose to become the company’s first non-German board member and chief technology officer. His experience in enterprise software laid the groundwork for his subsequent ventures. After leaving Infosys, Sikka founded VianAI, an enterprise AI and analytics startup 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 AI applications and analytics tools designed to help businesses use artificial intelligence in decision-making. However, Hang Ten is distinct from VianAI, targeting a different market: AI-native services for continuous software development and maintenance.
According to Navin Chaddha, Mayfield’s managing partner, the firm backed Hang Ten because of Sikka’s career experience and the belief that the startup’s AI-native model can scale differently from traditional services firms. “Traditional services scale linearly with headcount,” Chaddha explained. “Hang Ten is built so its leverage grows with every project.” The early crew at the startup includes executives who have worked with Sikka for years across SAP, Infosys, and VianAI. Among them are co-founders Navin Budhiraja, the startup’s CTO; Sanjay Rajagopalan, its chief design officer; and Tao Liu, its senior vice president of forward deployed engineering. Headquartered in the Bay Area, Hang Ten is hiring across delivery, engineering, sales, and leadership and plans to expand across multiple locations globally to meet enterprise demand.
AI-Native IT Services: A New Paradigm
Hang Ten describes itself as an enterprise AI services company built around agentic code generation, reusable AI skills, and domain expertise. Unlike traditional IT services firms that rely on large teams of human engineers for customization and integration, Hang Ten leverages AI to automate repetitive tasks, generate code, and maintain software environments. This approach aims to reduce costs and accelerate delivery times. The startup is already working with customers, including Siemens Gamesa Renewable Energy and Fresenius, on AI-native project delivery. In a blog post announcing the venture, Sikka said Hang Ten was already helping large enterprises “hang ten on the biggest wave of our lifetimes.”
The timing of Hang Ten’s launch is significant. The IT services industry, particularly in India, is facing pressure from AI disruption. 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 said AI could expand the industry’s addressable market. Infosys itself has sought 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. The debate comes as investors reassess the outlook for traditional IT services firms, with Infosys shares down over 35% this year.
Sikka’s move reflects a broader trend of veteran tech leaders betting on AI to disrupt the outsourcing industry. Other notable efforts include HCL Technologies’ AI platform and Wipro’s partnership with Google Cloud, but Hang Ten’s pure-play AI-native model sets it apart. The startup’s seed round, led by Mayfield, is among the largest for an AI services company at this stage. The involvement of Aramco Ventures, the corporate venture arm of Saudi Aramco, signals interest from energy giants in AI-driven enterprise solutions.
What Hang Ten Means for the Future of IT Services
The emergence of Hang Ten raises important questions about the future of the IT services industry. If AI can perform software development and maintenance tasks that currently require large teams of human engineers, the traditional labor arbitrage model that made Indian IT firms successful could be disrupted. However, proponents argue that AI will augment rather than replace human workers, enabling firms to take on more complex projects. Sikka’s track record suggests he understands the industry’s dynamics: he attempted to shift Infosys toward higher-value work during his tenure, but faced resistance from the board and founders. Now, with Hang Ten, he has the freedom to build a company from scratch with AI at its core.
The startup’s early customers, Siemens Gamesa and Fresenius, represent large, complex enterprises that require continuous software updates and integration. By using AI to generate and maintain code, Hang Ten could offer faster turnaround times and lower costs. The company plans to scale its platform by building a library of reusable AI skills—pre-trained models and automation scripts that can be adapted for different clients. This approach could create a flywheel effect: the more projects Hang Ten completes, the more data it collects to improve its AI models, increasing efficiency over time.
Competition will be fierce. Traditional IT services firms like Infosys, Tata Consultancy Services, and Accenture are investing heavily in AI tools and platforms. They have deep relationships with clients and large workforces to deploy. However, they also face the challenge of balancing AI adoption with protecting their existing revenue streams. Startups like Hang Ten, unencumbered by legacy business models, may have an advantage in agility. Additionally, pure-play AI services startups are attracting venture capital at a rapid pace, with investors betting that the market is ripe for disruption.
Another dimension is the regulatory and ethical landscape. As AI takes on more software development tasks, questions about accountability, security, and job displacement will arise. Sikka has not publicly addressed these issues in detail, but his experience in large-scale enterprise software at SAP and Infosys positions him to navigate them. Hang Ten’s advisory board, including Jerry Yang, adds credibility and strategic guidance. Yang, as a co-founder of Yahoo, brings internet and technology expertise.
The funding environment for AI startups remains strong, despite a broader slowdown in tech investments. Hang Ten’s $32 million seed round, which closed in 2026, reflects continued investor appetite for AI-first enterprises. Mayfield’s involvement is notable; the firm has a history of backing enterprise software companies. The strategic investment from Aramco Ventures indicates that oil and gas companies are looking to leverage AI for operational efficiency. This cross-industry interest could open new markets for Hang Ten beyond traditional tech clients.
In summary, Vishal Sikka’s Hang Ten Systems represents a bold attempt to apply AI to the core of enterprise IT services. With a strong founding team, early customers, and significant seed funding, the startup aims to challenge the established order of the IT services industry. Whether it succeeds will depend on its ability to deliver measurable results, scale its AI models, and convince enterprises to trust AI with their critical software operations. The next few years will be crucial as the industry watches to see if “AI-first services” truly become a $300-$400 billion market or if traditional firms adapt quickly enough to retain their dominance. Sikka, who has seen both the highs and lows of leading a major IT firm, is placing a bet that the wave of AI is too big to ignore.
Source: TechCrunch News