This week was relatively slow but there was one notable deal I want to talk about –
PagerDuty has acquired Jeli.io, an incident analysis platform. The acquisition will allow PagerDuty to provide a more comprehensive incident management solution, combining Jeli’s ability to collect and analyze data on human factors with PagerDuty’s existing incident response and AIOps capabilities.
Jeli’s platform goes beyond simply collecting data on technical errors, also gathering information on team coordination, communication, and other human factors that can contribute to incidents. This data can then be used to identify root causes and develop proactive solutions to prevent future incidents.
Jeli was foundedin 2019 and had raised a total of $19mm over two rounds. It last raised a $15mm Series A in September 2022. Backers include Heavybit and boldstart ventures.
The IT Operations Market (which includes AI Ops) is huge and growing with Gartner estimating it to be over $39bn. The largest players are ServiceNow, Hewlett Packard Enterprise, IBM, Broadcom, Ciscoand others. There have been a few handful of notable deals in the last twelve months consolidating scaled startups within broader platforms.
Hewlett Packard Enterprise acquired OpsRamp in March this year for $300mm. In July 2023, Dell Technologiesannounced its intent acquireMoogsoft, founded in 2012 and one of the first companies to bring an AIOps platform to market. Additional details on acquisition price should become available once Dell announces its Q3 results at the end of the month.
Moogsoft has been directly competing with BigPanda, which has significant institutional backing including Advent and Insight Partners. The company has raised a total of $340mm and earned unicorn status with its $190mm Series D in January 2022. It last raised a small $20mm in Series E in August 2022 with participation from Wells Fargo Strategic Capital and UBS.
One of the remaining scaled, independent AIOps players in the space with significant funding and a strong executive team is Aisera. The company was founded by serial entrepreneur Muddu Sudhakar who sold his last startup Caspida to Splunk for $195mm in 2015. The company has raised a total of $165mm since founding in 2017. They last raised a $90mm Series D in August 2022, led by Goldman Sachs Asset Management and Thoma Bravo.
Aisera could potentially be attractive to Cisco (given their last ITOM acquisition was AppDynamics in 2017), Dynatrace, Broadcom (though they are still trying to get VMware over the finish line), ServiceNow, IBM and even MicroFocus acquirer OpenText(less likely).
I expect to see more of the smaller software-focused PE firms lead rounds in AIOps opportunities as many of the venture-backed startups start to see a shorter capital runway in the next 12-18 months.
And that’s it for this week. Happy weekend everyone!