Traversal, a New York startup building AI agents that hunt down the causes of software failures, has raised $120 million in a round that values it at $1 billion.
The deal, announced Nov. 3, arrives as businesses lean heavily on AI coding tools and then struggle to keep the resulting systems running smoothly. Traversal is pitching itself as the layer that keeps that software reliable once it is live.
Who Backed the Round
Kleiner Perkins, Redpoint Ventures and Khosla Ventures co-led the financing. Existing investors Sequoia Capital and Battery Ventures also participated significantly.
The company plans to use the capital to grow its AI platform and push further toward automating the troubleshooting process, expanding its research, engineering and commercial teams along the way.
What Traversal Builds
Founded in 2023, Traversal makes AI agents that investigate software breakdowns, pinpoint their root causes and suggest fixes. The agents sift through billions of logs and performance metrics spanning applications and infrastructure.
The goal is to cut the hours engineers spend digging through sprawling systems when something goes wrong. Customers include American Express, Pepsi and Blackstone, according to reporting by Forbes cited by The American Bazaar.
Why AI-Generated Code Creates New Problems
AI coding assistants let teams build applications and ship features faster, but the software they produce can be harder to monitor and maintain. That tradeoff is the opportunity Traversal is targeting.
CEO and co-founder Anish Agarwal told Forbes that AI-built software tends to break differently from conventional code. Models can quietly drift into unintended behavior while systems appear healthy, and updates can clear existing tests yet fail in scenarios developers never anticipated.
Kleiner Perkins partner Mamoon Hamid said AI has made software reliability a more pressing issue, describing it as an emerging challenge for companies deploying the technology.
Growth Metrics and a Real-World Example
Traversal said its annual recurring revenue rose ninefold in the six months before the announcement, though Agarwal did not share exact figures. Its agents handled more than 150,000 investigations for customers in the prior quarter.
Agarwal pointed to an outage at a bank where thousands of engineers gathered in a war room to figure out why customers could not reach their accounts. The culprit turned out to be a sluggish database buried deep in the infrastructure.
When a similar disruption struck months later, he said, Traversal's agents worked through the troubleshooting in five minutes.
An Academic Founding Team
Traversal was founded by Agarwal, Raaz Dwivedi, Raj Agrawal and Ahmed Lone. Agarwal is a professor of operations research and computer science at Columbia University, and Dwivedi holds a comparable post at Cornell Tech; both come from machine learning research.
Agrawal earned a Ph.D. in computer science from MIT, while Lone previously worked at Citadel Securities.
What the Deal Signals for Founders and Investors
The round reflects a broader shift in where AI money is flowing. Beyond tools that write code, investors are funding companies that keep that code working in production.
For founders, the takeaway is that the operational side effects of AI adoption are becoming markets in their own right. For enterprises, Traversal's growth suggests that automated incident response is moving from experiment to line item.
Source: The American Bazaar
