Former Infosys Chief’s AI Startup Secures Another $53M

Hang Ten Systems, an AI startup established by former Infosys CEO Vishal Sikka just four months ago, has secured an additional $53 million in seed funding. This latest investment round was finalized merely five weeks after the initial $32 million seed round, according to company statements provided to TechCrunch.

Lead by Temasek’s early-stage investment platform Xora, this new capital brings Hang Ten’s total funding to $85 million. Mayfield, which led the previous investment, also participated. Other notable investors include Aramco Ventures, Intel CEO Lip-Bu Tan, Micron CEO Sanjay Mehrotra, and Yahoo co-founder Jerry Yang, who serves on the company’s board.

Launched in May, Hang Ten operates on the premise that AI can fundamentally transform how large enterprises build and maintain software. The startup advises companies—typically those with annual revenues exceeding $10 billion—on AI strategy while also assisting in software development and modernization.

“The build process itself has essentially become close to zero marginal cost and close to zero time,” Sikka (pictured above) explained to TechCrunch. He emphasized that AI is shifting the focus of software development from writing code to defining requirements and validating system performance.

This thesis appears to be gaining traction with clients. Within 25 days of the initial meeting with one customer, Hang Ten signed a multimillion-dollar contract to develop a mission-critical software system, Sikka noted, adding that he had never witnessed enterprise deals move with such speed.

Hang Ten is currently collaborating with a mix of existing clients and late-stage prospects across 21 major enterprises, according to Sikka. Some prospects are in the proposal or contract-negotiation phase. The startup has secured multiple seven-figure contracts and is pursuing eight-figure deals, with clients spanning the U.S., Europe, the Middle East, and Asia, including Fresenius Kabi, Saudi Aramco, and Siemens Energy.

Early customer successes prompted Xora to approach Hang Ten regarding investment, Sikka said, noting that Xora saw an opportunity to introduce the startup to other companies within Temasek’s portfolio. While Sikka declined to disclose Hang Ten’s valuation, he confirmed that the second seed round represented a significant increase.

With this fresh capital, Hang Ten plans to expand its engineering, consulting, and sales teams. The Palo Alto-based startup currently employs about 20 to 25 people across the U.S., the Middle East, and Australia, with plans to hire in Europe and India, Sikka stated.

Hang Ten enters a competitive market where AI model developers like OpenAI and Anthropic are expanding their enterprise offerings, while traditional consulting firms are racing to integrate generative AI into their services.

“Enterprises still need trusted partners who are independent of the underlying platform and work solely in the interest of the enterprise,” Sikka said. “There will always be room for companies like us.”

Hang Ten’s competitive edge lies not in building another AI model, but in adapting AI to the complex software development processes of large enterprises. CTO Sanjay Rajagopalan told TechCrunch that the startup’s engineers utilize an in-house framework called Hobie, which packages reusable AI “skills” for regulated industries and complex enterprise software projects.

“We are actually delivering production software,” Rajagopalan said. “It’s not like we are doing some kind of PoC.”

Hang Ten’s approach is already placing it in competition with traditional systems integrators. Many of the startup’s engagements, Sikka said, are replacing incumbent providers, though more than half of its current opportunities involve new projects that companies had previously deferred, rather than work taken from existing vendors.

Rajagopalan noted that Hang Ten can use teams of about two to four people for some projects that might previously have required around 30, although customers or independent third parties still handle final quality checks and certification. The startup promises clients a 10-fold improvement in cost, speed, or a combination of both, he said.

Even within its first four months, Hang Ten has received serious acquisition offers from “very big companies,” Sikka told TechCrunch. He declined to identify the prospective buyers, stating that the startup has turned them down for now as it focuses on business expansion.

Before founding Hang Ten, Sikka co-founded enterprise AI startup VianAI in 2019 after leaving Infosys in 2017. It raised $50 million in seed funding and later secured $140 million in a 2021 round led by SoftBank Vision Fund 2.

Sikka departed that startup in April, according to his LinkedIn profile. He told TechCrunch that VianAI is “going through a transaction,” declining to provide further details.

Regarding how startups like Hang Ten could disrupt service providers like Infosys, Sikka noted, “We are fortunate that we don’t have the burden of legacy that we have to transform.”

The startup takes its name from “hang ten,” a surfing maneuver where a surfer rides with all 10 toes over the front of the board. For Sikka, it reflects the startup’s ambition to help enterprises ride the ongoing AI wave, which he described as “probably the biggest wave of our lives.”