Atomicwork gets backing from Khosla for its AI alternative to old-school IT software like ServiceNow

Atomicwork, a SaaS startup led by Indian founders, has raised $25 million in a fresh investment round backed by Khosla Ventures, as it plans to scale and deploy AI agents to simplify communication and service delivery between employees and their enterprises.

Amid growing digital adoption, enterprises struggle to natively provide quick support and easy access to information for their employees. The IT service management market offers tools to solve this problem to some extent. However, deploying these solutions requires time and specialized resources. The emergence of AI has brought some relief. Yet, enabling a chatbot-like experience often demands an incumbent enterprise system behind the scenes. It could be ServiceNow, BMC Remedy, or Jira Service Management.

Atomicwork replaces the incumbent’s presence with a modern AI-driven experience, enabling enterprises to offer automated service workflows. Employees can use these workflows to find work-related answers or access services from departments including HR, IT, or finance through integrations with apps such as Microsoft Teams, Slack, Intune, Okta, Notion, Salesforce, and GitHub, among others.

Vijay Rayapati, co-founder and CEO, defines Atomicwork as a “full-stack AI ServiceNow,” targeting global companies with around $1 billion in revenue and at least 1,000 people.

“The difference [between ServiceNow and Atomicwork] is architectural, what was built 25-30 years ago, versus how we build today,” Rayapati said in an exclusive interview.

Unlike deploying ServiceNow or any of its competitive IT service management platforms, which involves multi-year implementation cycles, Atomicwork’s platform could be implemented in no more than a couple of weeks, according to him. The startup also provides a universal agent to assist enterprises in setting up automated workflows.

Founded in 2022 by Rayapati, who previously founded the cloud management platform Minjar, which was acquired by Nutanix in 2018, along with Kiran Darisi and Parsuram Vijayasankar, both part of Freshworks’ founding team, the startup initially started with an AI assistant to automate enterprise workflows.

As the automation demand has grown and AI capabilities have advanced, Atomicwork introduced its agentic service management platform late last year, which brings context-aware AI agents that analyze multiple data sources to perform tasks across enterprise apps, such as resetting their work email password, relaying questions in a prospect sales call, or accessing their design catalog on Figma using Microsoft Teams or Slack.

ServiceNow — and others in this domain — also allows enterprises to develop and deploy AI agents based on their requirements. Nonetheless, Rayapati told TechCrunch that the startup, with a futuristic approach, has built its software for humans and “non-humans” (read AI agents).

“When humans need help within a business, they raise a ticket in ServiceNow, BMC, or Jira Service Management … we are basically enabling an architecture where [agents] can actually ping a message to get help — just like human employees,” he asserted.

Atomicwork utilizes existing LLM models from OpenAI, Anthropic, Cohere, and Meta, along with its in-house small models, which it uses for intent detection, routing, and slot filing, to enable workflow automation.

As AI deployment brings the question of data security and safety, Rayapati said the startup addresses this by offering enterprises the option to own the encryption keys for their data or bring their own model endpoints into Atomicwork. He also stated that the startup has signed agreements with cloud service providers AWS and Azure to restrict data retention and training and has multiple compliance certifications.

The all-equity Series A round, co-led by Khosla Ventures and Z47 (previously called Matrix Partners India), also saw participation from Battery Ventures, Blume Ventures, and Peak XV Partners. It was followed by a $3.3 million round involving over 40 CIOs, CTOs, and industry experts in September last year and a seed round of $11 million in 2023. So far, the startup has raised over $38 million.

Currently, Atomicwork has eight customers, most of whom are in the U.S., including Ammex Corporation, Zuora, and Pepper Money.

It plans to utilize the new investment to attract more customers by “doubling down” its AI R&D to bolster its platform engineering, strengthen its product and technology, and invest in building more strategic partnerships to expand integrations with companies including Oracle and SAP.

Rayapati did not disclose the exact valuation but said it was close to 5x the total capital it raised in the new round.

The startup has a team of more than 60 people, including over 50 in India.