Update: This story has been updated to reflect that ServiceNow says it is no longer in talks with Decagon.<\/p>\n
Buzzy AI agent startup Decagon could be the latest company swept up in a growing wave of AI dealmaking.<\/p>\n
The company, which was last valued at $4.5 billion<\/a> earlier this year, has hired a bank to evaluate acquisition interest, according to people familiar with the matter.<\/p>\n Decagon held early discussions with cloud software giant ServiceNow, but a spokesperson for ServiceNow says they’re not ongoing. People familiar with the matter told Business Insider there have also been early talks with other companies; if a deal does not materialize, Decagon could instead raise a new funding round.<\/p>\n “Our approach to M&A has not changed: we remain an organic growth company first. M&A is a tool to accelerate our roadmap or open meaningful new innovation,” said Amit Zavery, president, chief product officer, and chief operating officer of ServiceNow. <\/p>\n The interest in Decagon represents a new shift in the AI boom: after years of huge venture rounds and soaring valuations, tech companies are increasingly looking to buy their way into promising AI markets. Hugging Face was recently acquired<\/a> by Nvidia for 12.9 billion, and OpenRouter was snapped up by Stripe<\/a> for around $8 billion.<\/p>\n Growing AI-related businesses are often getting offers at a significant premium to their last valuation, so if Decagon were to accept an offer, it could be considerably higher than its previous $4.5 billion value.<\/p>\n Founded in July 2023 by Jesse Zhang and Ashwin Sreenivas, Decagon uses generative AI to automate customer support for enterprise customers<\/a>, including Delta, Snapchat, and Ticketmaster. The company has raised<\/a> over $400 million from a roster of well-known Silicon Valley investors, including Andreessen Horowitz, Index Ventures, Bain Capital Ventures, and Accel. It competes with industry veteran Bret Taylor’s Sierra, which was valued at $15.8 billion earlier this year.<\/p>\n ServiceNow’s previous interest in Decagon came as it looked to reassure investors that it can adapt<\/a> to AI\u2019s threat to traditional software businesses. Its shares tumbled earlier this year during the so-called SaaS-pocalypse<\/a>, when investors feared AI <\/a>could erode software companies\u2019 profit margins.<\/p>\n Want to discuss this story with someone?<\/p>\n Share as a gift<\/p>\n Want more Business Insider in your news feed?<\/p>\n \n Add BI in Google so our reporting is easier to find when you\u2019re searching for what matters.\n <\/p>\n