Harness, an AI DevOps tool founded by serial entrepreneur Jyoti Bansal in 2017, is expected to generate more than $250 million in annual recurring revenue by 2025, Bansal told TechCrunch.
The startup just raised $240 million in new Series E funding, giving the company a post-money value of $5.5 billion.
The round includes a $200 million primary investment led by Goldman Sachs and a planned $40 million tender offer with participation from IVP, Menlo Ventures and Unusual Ventures. Bansal said the tender offer is aimed at providing long-term liquidity to employees.
The new valuation is a 49% increase from the $3.7 billion valuation in a $230 million round in April 2022. With this funding, the startup has raised $570 million in equity to date.
As AI accelerates code creation, bottlenecks are growing in the much larger “post-code” phase of software development: testing, security checks, and deployment efforts that still consume nearly 70% of engineering time. As companies grapple with increasing amounts of AI code and the risk of introducing even a single line of flawed software into production systems, Harness’ tools can help automate this sprawling and error-prone layer.
Bansal is best known among developers for building and selling the app performance company AppDynamics to Cisco for $3.7 billion in 2017. In short, the world of postcoding is an area Bansal knows well.
Harness uses AI agents to automate functions such as testing, validation, security, and governance. It is built on a software delivery knowledge graph that maps code changes, services, deployments, tests, environments, incidents, policies, and costs. Bansal said the knowledge graph helps differentiate Harness from other AI platforms because it allows the system to deeply understand each customer’s software delivery process and architecture.
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“This knowledge graph is the context that the AI agent uses,” he told TechCrunch.
Dedicated agents leverage that context to generate pipelines that match each customer’s specific policies, architecture, and operational requirements.
Harness also uses an orchestration engine that translates AI recommendations into automated actions, with checks in place to ensure those changes are safely applied.
Because AI is not infallible, the system is designed with human oversight, Bansal said, noting that tests and fixes generated by AI are reviewed by engineers, compliance teams, or auditors before use.
Microsoft’s GitHub, GitLab, Jenkins, and CloudBees are among Harness’s major competitors. But Harness has plenty of traction, with more than 1,000 corporate customers including United Airlines, Morningstar, Keller Williams and National Australia Bank. To date, the startup has handled 128 million deployments, 81 million builds, secured 1.2 trillion API calls, and helped customers optimize $1.9 billion in cloud spending over the past year, Bansal touts.
The San Francisco-based company employs more than 1,200 people in 14 offices around the world, including Europe and the United Kingdom. Approximately 33% of its employees are in India, with a large engineering team in Bangalore and head office in Gurugram. Additionally, the Bangalore site is Harness’ largest development center outside the United States.
Harness plans to use the new funding to expand its research and development efforts, hiring “hundreds of engineers” at its Bangalore office and building additional automated testing, deployment, and security capabilities while improving the accuracy of its AI systems. The company also intends to strengthen its US market development operations and significantly expand its presence in international markets.
It’s also worth noting that earlier this year, Bansal merged his software observability company Traceable with Harness, a move that contributed to the growth of the company’s ARR forecasts.
“We brought the two companies together because we started to see that DevOps and application security work together in a very deep way,” Bansal said. “This year, we found this to be a very successful thesis, resulting in significant growth for both our DevOps and application security product sets.”
While the pay increase gave some employees some cash, Mr. Bansal said he still plans to take Harness public at some point, but declined to give a specific timeline.
“That’s what our goals and plans are all about,” he said of the eventual IPO. “Our business is very healthy, very strong, with high growth and profit margins, and if the timing is right, we would be a great public company.”
