Traversal raises $120M at a $1B valuation to fix what AI code breaks

Traversal, a New York startup whose AI agents find out why company software breaks, has raised $120 million in a Series B round. The deal values it at $1 billion, the company announced on Tuesday.

Kleiner Perkins, Redpoint Ventures and Khosla Ventures co-led the round. Sequoia Capital, Battery Ventures and Amex Ventures also took part, and Kleiner Perkins and Sequoia both increased their stakes. Traversal has now raised $173 million in total.

Its argument is that AI is writing code faster than people can keep it running. Co-founder and chief executive Anish Agarwal told Forbes that this new software is also harder to fix.

“They break in fundamentally new ways,” Agarwal told Forbes.

Site reliability engineering is the job of keeping websites and apps running. When a service goes down, engineers trace the fault through logs, metrics and code. Traversal’s agents do that search, test possible causes and suggest a fix.

The company says observability tools were built for people reading dashboards, not for agents. Its Production World Model turns telemetry, code and deployment history into a map an AI can read. Its Causal Search Engine then tests thousands of possible causes at once.

Traversal Workers start an investigation as soon as an alert fires. Traversal MCP passes what the system learns about production to AI coding agents, so they can avoid causing the next incident, the company says.

Agarwal told Forbes about one bank that gathered thousands of engineers in a “war room” when customers could not log in. The cause was a slow database deep in its systems. When a similar problem came back months later, Traversal’s agents found it in five minutes, he said.

Nubank, Harvey, DigitalOcean, PepsiCo and American Express use Traversal, the company said. Forbes reported that Blackstone is also a customer.

Traversal says its annual recurring revenue has grown nine times since the start of the year. Agarwal declined to give Forbes revenue figures. Customers ran more than 150,000 investigations last quarter, the company said. Monthly investigations rose from 513 to nearly 73,000 this year.

About two thirds of its use now goes beyond finding the cause of an outage. Customers also use it for alert triage, release risk and security, according to the company.

“Five weeks into our Traversal rollout, and it’s already becoming part of how our on-call engineers work incidents,” said David Vélez, founder and chief executive of Nubank.

Traversal built a benchmark called ORCA-bench with Cornell Tech and Columbia University. It tests general AI agents on 1,079 tasks where they must find the root cause of an incident.

The best of five frontier agents got 25.3% of medium-difficulty incidents right, Traversal said. Accuracy fell to 10% when incident reports were vague. Hallucination rates reached 40%.

“Site reliability engineering is one of the hardest problems in applied AI because every company’s software environment is different, and with downtime costing companies as much as $600 billion a year, the stakes are enormous,” said Agarwal.

Agarwal and Raj Agrawal earned their PhDs at MIT, and Raaz Dwivedi earned his at UC Berkeley. Ahmed Lone came from quant trading at Citadel Securities. Agarwal and Dwivedi have kept their faculty posts at Columbia University and Cornell Tech.

Traversal came out of stealth in June 2025 with $48 million from Sequoia and Kleiner Perkins. Amex Ventures invested in December 2025. The startup plans to hire across research, engineering and go-to-market teams.

AI has “created acuteness around the problem of cyber reliability,” Kleiner Perkins partner Mamoon Hamid told Forbes.

Cristian Dina is the CRO at The Next Web. He has interviewed 300+ industry leaders and authored the book King of Networking, establishing hi (show all) Cristian Dina is the CRO at The Next Web. He has interviewed 300+ industry leaders and authored the book King of Networking, establishing himself as one of the most connected and respected voices in the ecosystem. At just 23 years old, Cristian was included in the Forbes 30 Under 30 2025 list, representing a new generation of tech builders, bold thinkers who move fast, build with purpose, and create real impact.

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