Decagon Hires a Bank to Gauge Sale Interest, With ServiceNow Reportedly in Early Talks
The AI customer-support startup, last valued at $4.5 billion, is exploring an acquisition and has held early talks with ServiceNow, according to Business Insider. Here is what was reported, who else is in the space, and why ServiceNow is in the frame.
Decagon, the AI agent startup that automates customer support for large companies, has hired a bank to evaluate acquisition interest, according to a Business Insider report that cites people familiar with the matter. The company has held early discussions with ServiceNow (NOW) and other potential buyers, the report said. If no deal materializes, Decagon could instead raise a new funding round. None of this has been confirmed by the companies, and no price has been reported.
What was reported
Business Insider reported that Decagon has engaged a bank to field interest, and that ServiceNow is one of the companies it has talked to. The talks are described as early. Growing AI businesses often receive offers at a significant premium to their last valuation, the report noted, so an accepted bid could land well above the $4.5 billion figure. Decagon's own blog post from March 4 described that valuation as coming from its first employee tender offer, a continuation of the $250 million it had raised shortly before.
Who Decagon is
Decagon was founded in July 2023 by Jesse Zhang and Ashwin Sreenivas. It uses generative AI to handle customer support for enterprise clients, and Business Insider lists Delta, Snapchat and Ticketmaster among them. Its backers include Andreessen Horowitz, Index Ventures, Bain Capital Ventures and Accel, and it has raised more than $400 million in total. Its closest rival is Sierra, the startup co-founded by Bret Taylor, which Business Insider says was valued at $15.8 billion earlier this year.
Why ServiceNow is in the frame
ServiceNow sells workflow software to large enterprises, and a customer-service agent would plug into that business. The company has been working to show investors it can adapt to AI after software stocks sold off earlier this year on fears that AI could erode margins, a stretch Business Insider called the "SaaS-pocalypse." ServiceNow shares also fell when it announced a deal for security firm Armis, which was valued at $7.75 billion in cash, and the stock has since rebounded as it keeps investing in AI, per the same report. A Decagon purchase would be a second large acquisition in a year.
A wave of AI deal-making
| Target | Buyer | Reported value | Status |
|---|---|---|---|
| Hugging Face | Nvidia | $12.9B | Recently acquired, per Business Insider |
| OpenRouter | Stripe | About $8B | Purchase being finalized, per Business Insider |
| Armis | ServiceNow | $7.75B | Announced late last year |
| Decagon | ServiceNow (early talks) | Not reported | Bank hired; funding round is the alternative |
The Decagon report fits a pattern the article describes: after years of large venture rounds, tech companies are increasingly buying their way into AI markets rather than building them. The Hugging Face and OpenRouter figures are as reported by Business Insider and we have not independently confirmed them.
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