‘It was just a fight that we decided to pick’: Serval raises $150 million at a $3 billion valuation to take on ServiceNow

Serval, a startup aiming to challenge ServiceNow, has secured $150 million in funding at a $3 billion valuation for its third funding round in a year. CEO and co-founder Jake Stauch compared raising funds to settling a fight in a prison yard, stating, “It was just a fight that we decided to pick.” The company's sales pitch revolves around replacing ServiceNow, with Serval's name and branding bearing a resemblance to their target.

Stauch and co-founder Alex McLeod met at Verkada, and they identified ServiceNow as an AI knock-out based on a list of the biggest enterprise software companies. Serval's solution is built around AI-written code, promising to disrupt the market by making workflow automation cheaper and more efficient. The company has seen its annual recurring revenue double every quarter since the Series B, but they have not disclosed specific revenue figures.

Serval's valuation and growth trajectory have caught the attention of investors, with Sequoia leading the Series C round. The startup's unique value lies in its AI platform, which customers are adopting rapidly, but the incumbent ServiceNow argues that replicating its governance and operational depth is a challenge, even for a startup.

ServiceNow has launched a standalone AI service desk, Flow, priced at $2 per conversation, which can be deployed in a day without an implementation project. Despite a decline in its stock price following the news, ServiceNow remains a dominant player in the market.