Former Infosys CEO Launches New Startup Aiming to Disrupt the IT Services Industry

For many years, IT service companies have generated substantial revenue by helping businesses outsource various technical tasks such as customizing, integrating, and maintaining enterprise software. Vishal Sikka, who formerly served as CEO of Infosys — one of India’s largest players in this sector — now believes that artificial intelligence has the potential to take over much of this workload.

As reported on Wednesday, his newly established startup, Hang Ten Systems, has secured a $32 million seed financing round led by Mayfield. The round also includes strategic investment from Aramco Ventures and contributions from angel investors. With Jerry Yang, co-founder of Yahoo, sitting on its board, the company claims to enable enterprises to continuously develop, modify, and operate software through AI-powered development methods and automation tools.

Hang Ten is entering a market where existing IT service firms, including Infosys, are competing to integrate artificial intelligence into their operations by forming partnerships with companies such as Anthropic and OpenAI.

The launch of this startup comes at a time when there is growing discussion about whether artificial intelligence will not only expand the industry’s potential customer base but also fundamentally transform the way enterprise software is designed, maintained, and delivered.

Clearly, some enterprises are keen to explore AI-based service solutions, particularly those offered by someone with Sikka’s extensive background. He spent 12 years developing enterprise software at SAP before serving on Oracle’s board. Navin Chaddha, managing partner at Mayfield, told TechCrunch that the company “only began operations a month ago” yet already has customers.

The startup states that it is collaborating with clients such as Siemens Gamesa Renewable Energy and Fresenius to deliver projects using AI-native approaches. In a separate blog post announcing the venture, 59-year-old Sikka said Hang Ten is already helping large corporations “ride out the biggest wave of our time.”

Headquartered in the Bay Area, Hang Ten informed TechCrunch that it is currently hiring across various roles including delivery, engineering, sales, and leadership positions. The company also plans to expand its operations globally to meet rising demand from enterprises.

According to their LinkedIn profiles, the startup’s initial team consists of executives who have worked with Sikka for years at companies such as SAP, Infosys, and his previous enterprise AI startup, VianAI. This group includes co-founder Navin Budhiraja, who serves as the company’s CTO; Sanjay Rajagopalan, its chief design officer; and Tao Liu, its senior vice president of forward deployed engineering.

After stepping down as Infosys’ CEO in 2017, Sikka founded VianAI. The company emerged from stealth mode in 2019 with $50 million in seed funding, and later raised an additional $140 million in a 2021 financing round led by SoftBank Vision Fund 2.

Chaddha explained to TechCrunch that Hang Ten is distinct from VianAI, noting that Sikka’s earlier venture targeted a different market. VianAI focused on enterprise AI applications and analytics tools designed to assist businesses in making decisions using artificial intelligence. In contrast, Hang Ten positions itself as an enterprise AI services provider that leverages agentic code generation, reusable AI skills, and deep domain expertise.

Mayfield invested in Hang Ten due to Sikka’s extensive professional experience, as well as its belief that the startup’s AI-native business model has the potential to scale in a way that differs from traditional service companies.

“Traditional service firms expand in a linear manner based on headcount,” Mayfield said. “Hang Ten is structured so that its efficiency grows with each project it undertakes.”

Hang Ten emerges as investors grapple with questions about how artificial intelligence will impact the economics of the IT services industry. Earlier this year, analysts at Jefferies argued that IT services could be among the first sectors to experience significant disruption from artificial intelligence. However, Infosys chairman Nandan Nilekani claimed this week that artificial intelligence may actually expand the industry’s potential customer base.

Infosys itself has sought to view artificial intelligence as an opportunity rather than a threat. The company told investors this month that “AI-first services” could create a market worth between $300 billion and $400 billion by 2030. This ongoing debate comes as investors reassess the prospects for traditional IT service firms, with Infosys’ shares declining by over 35% so far this year.