Serval raises $150m to challenge ServiceNow with AI agents

The shift to AI automation

Serval recently closed a $150m Series C funding round led by Sequoia. This investment puts the San Francisco-based company at a $3bn valuation, a significant jump from the $1bn valuation it held in December. The company is positioning itself as a direct competitor to established enterprise platforms like ServiceNow.

While many companies are adding AI features to their existing software, Serval is marketing its product as a true alternative. CEO Jake Stauch explained to Reuters that the platform is not just another layer of spending on top of a current system of record. Instead, it is designed to replace the core infrastructure that large companies use to manage internal operations.

The company has seen rapid growth, with its annual recurring revenue doubling every quarter since its Series B round. This momentum has helped it secure customers like Fox Corporation, WPP, and Live Nation. The funding will support a massive expansion, including opening new offices in New York, London, and Austin.

How Catalyst works

At the center of Serval's offering is an automation agent called Catalyst. This tool is designed to let employees without any engineering background build complex workflows using code. By turning business requirements into fixed tools, the platform allows companies to automate repetitive tasks across various departments.

The system is built with specific administrative controls to ensure security and oversight. Administrators can manage guardrails, permission checks, and approvals to keep the automated actions within company policy. Stauch noted that the agent used by administrators to build these tools is kept entirely separate from the one used by general employees.

The platform initially focused on IT tasks like managing staff access and troubleshooting hardware. However, it has since expanded to support HR, finance, security, and legal teams. Even with high levels of automation, the company notes that customers often still want human approval for sensitive actions like password resets.

Replacing legacy systems

One of the most notable developments in Serval's growth is the trend of large enterprises moving away from ServiceNow. For example, the car maker Lucid Motors moved its entire 10,000-person organization from ServiceNow to Serval in just 45 days. The company described this transition as a full rip and replace of their existing setup.

This move comes at a time when ServiceNow is facing some headwinds. While the company maintains a 98% renewal rate, its shares recently saw a 25% intraday drop after missing its bookings outlook. Despite this, ServiceNow reported that inbound interest from first-time customers has increased by 60%.

The competition reflects a broader conversation about the future of software. Some observers have discussed a 'SaaSpocalypse,' a term referring to the potential decline of traditional Software as a Service models. However, leaders at companies like Salesforce have dismissed these concerns as nonsense, suggesting that deeply embedded systems may still hold significant ground.

Scaling the workforce

To support its growing customer base, Serval plans to hire more than 500 people over the next 12 months. The company's team size has already increased tenfold in the past year. A significant portion of these new hires will be dedicated to a new professional services arm called ProServal.

More than 100 of these new roles will be for automation engineers. These specialists will work directly inside customer teams to identify specific tasks that can be automated and to redesign existing processes. This hands-on approach is intended to help large organizations navigate the transition from old software to new AI agents.

The company is also focusing on training for these roles. About half of the new hires will be recent graduates who will undergo a four-week training program. Stauch noted that because these tools didn't exist two years ago, there is a shortage of people with long-term experience in this specific field.