Startup Tessera Labs Raises $60 Million to Automate Enterprise IT Migrations

Tessera Labs emerged from stealth with a $60 million series A funding round led by Andreessen Horowitz. The round valued the company at $320 million and included participation from Foundation Capital, Myriad Venture Partners and Osage University Partners.

The startup is developing AI agents to automate enterprise IT migrations, particularly ERP system transformations. These projects have historically required large teams of external consultants and multi-year timelines.

Nagrecha founded Tessera Labs after observing IT transformation projects during his childhood. His father worked in high-level IT roles at firms including Jacobs Engineering, where Nagrecha witnessed the challenges of large-scale system migrations. Nagrecha earned a PhD in AI systems by age 20 and held research positions at Meta and Netflix before starting the company.

He stated that traditional consulting models often involve repeated budget increases and extended project durations.

Labs is working with pharmaceutical company Merck and Xerox. The company is also conducting trials with additional Fortune 500 enterprises. The firm deploys AI agents to manage end-to-end ERP transformations, including business process mapping and code reconfiguration.

Nagrecha said the approach can reduce staffing from hundreds of consultants to a small team and shorten coding cycles from months to weeks. 6% of revenue on IT, with 60% to 70% allocated to external services. 4 trillion in 2024.