Enterprise search company Elastic has agreed to acquire DeductiveAI, a young startup using artificial intelligence to detect and resolve software bugs, in a deal valued at up to $85 million, according to a person familiar with the agreement. Founded in 2023, DeductiveAI exited stealth last November alongside a $7.5 million seed round led by CRV, with participation from Databricks Ventures, Thomvest Ventures, and PrimeSet — a financing that valued the company at $33 million, according to PitchBook. The transaction, which represents a swift exit for the startup, reflects a broader pattern of established tech companies snapping up AI-native ventures to weave agentic capabilities into their existing product lines.
The acquisition lands in one of the fastest-growing corners of the enterprise software market: AI site reliability engineering, or AI SRE. As companies contend with a deluge of AI-generated code, demand has surged for tools that can automatically identify and fix system failures, freeing human engineers from constant firefighting. Elastic, which went public in 2018 and built its reputation around the Elasticsearch search and analytics engine, plans to fold DeductiveAI's technology into its observability platform. The integration would allow Elastic customers to automatically monitor software performance and resolve outages in real time, strengthening the company's suite of tools for tracking system health and spotting security threats.
DeductiveAI was co-founded by Rakesh Kothari, a former vice president of engineering at ThoughtSpot, and Sameer Agarwal, who previously held roles at the Apache Software Foundation and Meta and was among the founding engineers at Databricks. Despite reaching roughly $1 million in annual recurring revenue, the startup was being outpaced by Resolve AI, a two-year-old competitor co-founded by former Splunk executive Spiros Xanthos and Mayank Agarwal and backed by Greylock. Neither Elastic nor DeductiveAI responded to multiple requests for comment from TechCrunch on the deal.