AI Agent Firm Decagon Has Held Early M&A Talks and Employed a Banker
Update: This story has been up to date to replicate that ServiceNow says it’s now not in talks with Decagon.
Buzzy AI agent startup Decagon might be the newest firm swept up in a rising wave of AI dealmaking.
The firm, which was final valued at $4.5 billion earlier this yr, has employed a financial institution to guage acquisition curiosity, in keeping with individuals accustomed to the matter.
Decagon held early discussions with cloud software program big ServiceNow, however a spokesperson for ServiceNow says they don’t seem to be ongoing. People accustomed to the matter instructed Business Insider there have additionally been early talks with different firms; if a deal doesn’t materialize, Decagon may as an alternative elevate a brand new funding spherical.
“Our strategy to M&A has not modified: we stay an natural development firm first. M&A is a software to speed up our roadmap or open significant new innovation,” stated Amit Zavery, president, chief product officer, and chief working officer of ServiceNow.
The curiosity in Decagon represents a brand new shift within the AI growth: after years of giant enterprise rounds and hovering valuations, tech firms are more and more seeking to purchase their method into promising AI bourses. Hugging Face was recently acquired by Nvidia for 12.9 billion, and OpenRouter was snapped up by Stripe for round $8 billion.
Growing AI-related companies are sometimes getting gives at a big premium to their final valuation, so if Decagon have been to just accept a proposal, it might be significantly greater than its earlier $4.5 billion worth.
Founded in July 2023 by Jesse Zhang and Ashwin Sreenivas, Decagon makes use of generative AI to automate customer support for enterprise customers, together with Delta, Snapchat, and Ticketmaster. The firm has raised over $400 million from a roster of well-known Silicon Valley traders, together with Andreessen Horowitz, Index Ventures, Bain Capital Ventures, and Accel. It competes with trade veteran Bret Taylor’s Sierra, which was valued at $15.8 billion earlier this yr.
ServiceNow’s earlier curiosity in Decagon got here because it regarded to reassure traders that it can adapt to AI’s menace to conventional software program companies. Its shares tumbled earlier this yr through the so-called SaaS-pocalypse, when investors feared AI may erode software program firms’ revenue margins.
It was additionally punished for making a $7 billion acquisition of the safety trade Armis, a deal introduced late final yr. The inventory has since rebounded by 55% in the past six months as ServiceNow continues to take a position closely in AI and reshape elements of its trade.
