Serval Raises $150 Million at $3 Billion to Attack ServiceNow

Serval has raised $150 million at a $3 billion post-money valuation — its third round in 12 months — to keep picking a very specific fight with ServiceNow. Sequoia led the Series C, just as it led the $75 million Series B in December that valued the company at $1 billion. The new round brings Serval's total funding to $277 million.

Jake Stauch, Serval's CEO and co-founder, isn't shy about the matchup. "It was just a fight that we decided to pick," he told Fortune, borrowing a prison-yard theory: on your first day, you find the biggest guy and beat him up. The biggest guy here is ServiceNow. Serval's ads name it, its sales pitch is built around replacing it, and the company names even sound alike — though Stauch says that's a coincidence. "I really like the cat name."

How fast is Serval actually growing?

Fast by almost any measure except the one it won't disclose. The company had roughly 20 employees in January and has about 200 now. Stauch expects at least 700 by the end of next year — a headcount that would grow roughly 3.5x in about two years.

Revenue is the fuzzier picture. Serval says annual recurring revenue has doubled every quarter since the Series B but declines to give dollar figures. The customer proof points it does offer: WPP, the European advertising conglomerate, is listed on its website, and Serval says two Fortune 20 companies converted in the last six months. "Those are two names we wish we could name and we cannot," Stauch said.

The founding story explains the bet. Stauch and co-founder Alex McLeod, Serval's chief technology officer, met at the security-camera company Verkada. When they went hunting for a company to build, they listed the biggest enterprise software companies ever and asked which ones AI could knock over. ServiceNow was "two or three on that list," Stauch said.

Their thesis: ServiceNow is, under the branding, a workflow automation company built on drag-and-drop tools and custom configuration — and AI-written code makes all of that cheap. "If workflow automation is about to be disrupted," Stauch said, "then actually what we're building is not just a solution for these customers we've been talking to, but it's actually a new generation of massive enterprise software company." He's skeptical incumbents can just bolt AI onto what they have. "I would be very curious around the actual go-live adoption of those products," he said.

What does the product actually do?

McLeod walked through the mechanics. Serval builds automations in an agent called Catalyst, tests them in a separate environment with branching, access controls and audit logs, then publishes them to a second agent that employees use. "It's not just enough to give people a coding agent," he said.

Sequoia's conviction is loud. "From the data we've seen, Serval is on a trajectory to be the fastest-growing top-down Enterprise system-of-record company in history," Anas Biad, the Sequoia partner on the deal, told Fortune. He also pushed back on the critique that Serval lacks its own intellectual property compared with an incumbent holding 20 years of IT-department relationships. "Serval has exceptional IP in the platform and system of record it has built, which customers are adopting at an incredible pace," Biad said. "Our consecutive investments in the company speak to that."

Asked whether Sequoia's math depends on an eventual sale, Biad pointed to the long game: "Our mission at Sequoia is to help the daring build legendary companies, from idea to IPO and beyond. We believe Serval has the potential to become one of the largest software platforms in history." Stauch called the back-to-back raises "opportunistic," saying Serval has "years and years of runway in the bank" while large companies decide right now whether to stick with their current vendors.

For context on the prize: ServiceNow was worth around $150 billion before this week's earnings, down from a peak near $230 billion. Stauch's take on the ambition: "This delusional plan we had two years ago is actually starting to come to fruition."

How is ServiceNow hitting back?

Not with words alone. Sean Regan, general manager of Flow by ServiceNow, told Fortune the incumbent's edge is the part a startup can't copy. "Every AI agent needs trusted data, workflows, and governance to act on. That can't be easily replicated," he said in a statement. "Anyone can build a great demo. Running mission-critical operations for a global enterprise, securely and with every AI action governed, is the hard part, and it's what we do every day." He added: "AI makes it easier to build a startup. It doesn't make it easier to run workflows across an entire enterprise, millions of times, with the security and auditability customers require."

ServiceNow's answer is also shipping. Flow, a standalone AI service desk launched Oct. 1, can be running in a day without an implementation project, and new customers — including companies with no ServiceNow contract — will be able to buy it with a credit card. The published price is $2 per conversation.

Regan also cited ServiceNow's third-quarter results, released Wednesday: agentic AI consumption in production up more than 13 times year over year, a 98% renewal rate, AI ITSM deal volume up nearly 80%, and a 2026 AI annual contract value target raised to $1.7 billion from $1.5 billion.

The market was less impressed. The stock fell more than 17% in after-hours trading Wednesday and was down more than 26% Thursday. Third-quarter revenue of $4.11 billion edged past estimates, but earnings of $1 a share missed the $1.02 analysts expected, and fourth-quarter guidance of $4.25 billion to $4.26 billion fell short of the $4.36 billion consensus.

What does this change for practitioners?

Serval is also launching a services arm, ProServal, and plans to hire more than 100 "Automation Engineers" over the next year. About half will come straight out of college, get four weeks of training, and then be embedded inside customers to rebuild their workflows. Serval cites a Stanford Digital Economy Lab finding that employment for 22- to 25-year-olds in the most AI-exposed jobs has fallen 13% relative to older workers since late 2022.

Stauch frames the demand side through the Jevons paradox — the 19th-century observation that more efficient steam engines made Britain burn more coal, not less. Nobody finishes 10 tasks faster and goes home early. "We instead say, well, now I want 100 things done instead of just the 10," he said. For enterprise buyers weighing ServiceNow against a $3 billion challenger, that's the bet on the table.