Traversal emerges from stealth with $48 million from Sequoia and Kleiner Perkins to reimagine site reliability in the AI era

Sometimes talking over Zoom until 2 AM, Anish Agarwal, Raaz Dwivedi, Ahmed Lone, and Raj Agrawal talked about what it might mean to walk away from their lives—for a startup. All academics in some form or fashion, the group swapped ideas at the intersection of their research: causal machine learning, reinforcement learning, and AI agents.

For Agarwal, the decision wasn’t to be taken lightly. That semester, he’d just started a tenure-track position at Columbia after earning his PhD from MIT—he had an academic career that was taking shape. But he was drawn to the entrepreneurial unknown. 

“I had to get in the game,” said Agarwal, who’s originally from Singapore. “I was looking around at my peers—for example, at Cartesia and Reflection AI. They’re all super smart, and out here building companies. By DNA, they’re researchers with some commercial instinct. They’re solving really hard technical problems, and continuing to produce research in a very cool package. That felt right. That was my motivation.”

From those late-night meetings came Traversal, a startup founded in 2023 that focuses on observability and site reliability engineering (SRE)—helping engineers pinpoint and troubleshoot complex software failures with speed and precision. Troubleshooting is “one of the most complex workflows in software,” said Agarwal, Traversal’s CEO. “It’s why you can have 50 people firefighting in a war room until they find the answer.”

Today, Traversal launches from stealth with $48 million in funding from its seed and Series A rounds, Fortune has exclusively learned. Sequoia led the company’s seed round, while Kleiner Perkins led Traversal’s Series A. Nat Friedman and Daniel Gross’s NFDG and Hanabi are also investors. Traversal—named for both the computer science concept of a graph traversal and the idea of journeying through complex systems—counts among its customers Digital Ocean, Eventbrite, Cloudways, and a number of undisclosed Fortune 100 financial services companies. The company and others like it exist to stop software infrastructure crises and limit downtime. 

“Imagine you’re having a heart attack right now,” said Agarwal. “That’s the only thing that matters. It doesn’t matter what happens ten minutes from now, or what your dinner is going to look like. An engineering team has two heart attacks a week, and a debilitating condition. So, you never get time to think about planning ahead and being great.”

The bigger the company, the higher the stakes of this problem: Bratin Saha, chief technology and product officer at DigitalOcean, said via email that “the sheer volume and complexity of our cloud infrastructure—serving hundreds of thousands of customers—means that even minor platform incidents can quickly escalate, impacting customer experience and incurring significant costs.” Saha told Fortune that, over six months, Traversal has helped resolve problems 37% faster. Traversal’s traction over the last two years is both a product of this moment in tech, the AI wave—and timeless. 

“Whenever something new shows up, whether it’s a new trend, new market, new kind of product, or a new kind of technology, guess what? It needs to be monitored,” Sequoia partner Bogomil Balkansky said. “That’s observability. And it needs to be secured, which is security. And that’s why those two domains—observability and security—periodically produce big winners.”

Some winners from observability in recent years that Balkansky points out: Splunk, Datadog, Dynatrace, AppDynamics, and New Relic. For Traversal—which sits at the intersection of observability and AI, and builds on existing observability tools—this means there’s opportunity, especially given that the company’s riding the vibe coding wave.

“The amount of code being written was already growing at a staggering rate, and with AI code generation, it’s accelerating like never before,” said Kleiner Perkins partner Mamoon Hamid. “With more code created by AI, there is more surface area to troubleshoot. There is a need for AI to autonomously troubleshoot, mediate and even prevent complex incidents at scale—self-healing codegen.”

The academic-to-entrepreneur path that Agarwal and his cofounders now walk is well-trod, from VMware’s Mendel Rosenblum to Databricks’s Ali Ghodsi, and more. And though there’s much they don’t have in common, academic research and startups do share at least one key feature. 

“Most jobs, you’re at A and you have to get to B, and getting from A to B is really hard,” said Agarwal. “In research, though, you don’t really know where A is and you don’t know where B is. And even if you do know, it’s still very hard to get to—and I loved that. I enjoyed the uncertainty.” 

ICYMI...Here’s our exclusive on the New York-based health tech startup Tennr, which raised a $101 million Series C at a $605 million valuation to tackle the convoluted web of patient referrals.

Here we go again…Elon Musk’s xAI, according to Bloomberg, is in talks to raise $4.3 billion, adding to the $5 billion in debt he’s seeking for the company.

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

– Helsing, a Munich-based defense technology developer, raised €600 million ($691.6 million) in Series D funding. Prima Materia led the round and was joined by BDT & MSD Partners and existing investors Lightspeed Ventures, Accel, Plural, and others.

– Applied Intuition, a Mountain View, Calif.-based AI-powered vehicle intelligence company, raised $600 million in Series F funding and a tender offer at a $15 billion valuation. BlackRock and Kleiner Perkins led the round and were joined by Franklin Templeton, Qatar Investment Authority, Abu Dhabi Investment Council, existing investors Fidelity Management & Research Company, General Catalyst, Lux, and others.

– Ramp, a New York City-based financial operations platform for companies, raised $200 million in Series E funding. Existing investor Founders Fund led the round and was joined by Thrive Capital, D1 Capital Partners, General Catalyst, and others.

– Coralogix, a Boston-based full-stack observability platform, raised $115 million in Series E funding at an over $1 billion valuation. NewView Capital led the round and was joined by the Canada Pension Plan Investment Board, NextEquity, existing investors Advent International, Brighton Park Capital, Revaia, and others.

– Browserbase, a San Francisco-based browser infrastructure platform for agentic AI, raised $40 million in Series B funding. Notable Capital led the round and was joined by existing investors CRV and Kleiner Perkins.

– Sword Health, a New York City-based AI-powered healthcare platform, raised $40 million in funding at a $4 billion valuation. General Catalyst led the round and was joined by Khosla Ventures, Comcast Ventures, Lince Capital, and others.

– Payabli, a Miami-based payments infrastructure platform for software companies, raised $28 million in Series B funding. Fika Ventures and QED led the round and were joined by existing investors TTV Capital and Bling Capital.

– DÔEN, a Los Angeles-based women’s clothing brand, raised $25 million in Series A funding from Silas Capital.

– Arima Genomics, a Carlsbad, Calif.-based cancer diagnostics company, raised $22 million in Series C funding. Illumina Ventures led the round and was joined by John Stuelpnagel, Mostafa Ronaghi, and existing backers Co-Win Ventures and Berkeley Catalyst Fund.

– Sedai, a San Francisco-based AI-powered cloud optimization solution, raised $20 million in Series B funding. Atlantic Vantage Point led the round and was joined by Norwest, Sierra Ventures, and Uncorrelated Ventures.

– Extend, a New York City-based document processing platform, raised $17 million in funding. Innovation Endeavors led the $15 million Series A round and was joined by existing investors Y Combinator, Character VC, and angel investors. Innovation Endeavors led the $2 million seed round and was joined by Y Combinator, Character VC, and angel investors.

– Farsight, a New York City-based AI-powered financial insights and workflows platform, raised $13 million in Series A funding. SignalFire led the round and was joined by RRE Ventures, Link Ventures, K5 Ventures, and angel investors.

– Root, a Los Angeles-based social communication platform, raised $9 million in seed funding. Headline Ventures and Konvoy Ventures led the round and were joined by Kun Gao, Jack “CouRage” Dunlop, and others.

– Future Fields, an Edmonton, Canada-based protein biomanufacturing company, raised $8 million in Series A funding. Amplify Capital, Business Development Bank of Canada’s Climate Tech Fund, and R7 Partners led the round and were joined by TRAC VC, University of Alberta Innovation Fund, and existing investors Toyota Ventures, BoxOne Ventures, and Builders VC.

– Embedl, a Gothenburg, Sweden-based AI inference optimization technology provider, raised €5.5 million ($6.3 million) in pre-series A funding from Chalmers Ventures, Fairpoint Capital, SEB Greentech, and others.

– Quilt Health, a Boston-based complex diseases treatment developer, raised $6 million in seed funding. MaC Venture Capital and Underscore Ventures led the round and were joined by Meridian Street Capital, BoxGroup, Watershed VC, and Coalition Operators.

– ZOOT, a New York City-based blockchain-powered gaming platform, raised $6 million in seed funding. CoinFund led the round and was joined by Griffin Gaming Partners.

– Crosby, a New York City-based AI-powered hybrid law firm, raised $5.8 million in seed funding from Sequoia Capital, Bain Capital Ventures, and others.

– Studio555, a Stockholm-based interior design gaming and social app, raised €4 million ($4.6 million) in seed funding. HOF Capital and Failup Ventures led the round and were joined by Timo Soininen, Mikko Kodisoja, and Riccardo Zacconi.

– SaturnX, a Dubai, UAE-based stablecoin payments infrastructure provider, raised $3 million in seed funding. White Star Capital led the round and was joined by others.

– Zesty Paws, an Orlando-based pet supplement company, raised $3 million in seed funding. Willow Growth led the round and was joined by Habitat Partners and Off Leash Capital.

– Athena, a San Francisco-based generative engine optimization platform, raised $2.2 million in funding from Y Combinator, FCVC, Red Bike Capital, and others.

– Renow, a Helsinki-based AI-powered recommerce platform, raised €1.8 million ($2.1 million) in seed funding. Greencode Ventures led the round and was joined by existing investors Superhero Capital and Street Smart Capital.

Private Equity

– 65 Equity Partners, joined by Everberg Capital, acquired a minority stake in Allied OMS, a Southlake, Texas-based management services organization for oral and maxillofacial surgery practices. Financial terms were not disclosed.

– Allied Industrial Partners acquired a majority stake in Pride Dynamo, an Abilene, Texas-based power solutions provider for the industrial, oil and gas infrastructure, data center, and utility sectors. Financial terms were not disclosed.

– Neovera, backed by 424 Capital, Eagle Private Capital, and Plexus Capital, acquired Greenway Solutions, a Charlotte-based fraud testing firm. Financial terms were not disclosed.

– ROR Partners, a portfolio company of Gemspring Capital, acquired Incline Marketing, a St. Petersburg, Fla.-based digital marketing agency for service businesses. Financial terms were not disclosed.

– Shermco Industries, backed by Gryphon Investors, acquired Eastern High Voltage, a Robbinsville, N.J.-based electrical testing, maintenance, and other services provider. Financial terms were not disclosed.

– SolomonEdwards, a portfolio company of Renovus Capital, acquired Pencek Advisors, a Washington, D.C.-based private equity portfolio company-focused consultancy. Financial terms were not disclosed.

– Summit Partners acquired a minority stake in RIS Rx, a Newport Beach, Calif.-based pharmaceutical manufacturers’ management of gross-to-net leakage management solution for pharmaceutical manufacturers. Financial terms were not disclosed.

Exits

– Hunter Point Capital agreed to acquire a 16.1% stake in Equitix, a London-based infrastructure investor, developer, and fund manager, with approximately 14.6% from Tetragon Financial Group Asset Management and 1.5% from Equitix management at an enterprise value of £1.3 billion ($1.7 billion), excluding net debt.

– Eurazeo acquired a majority stake in Mapal, a Madrid-based operational management software provider for the hospitality and food service industries, from PSG Equity. Financial terms were not disclosed.

– Lee Equity Partners agreed to acquire a majority stake in Shackleton Advisers, a London-based financial advisory firm, from Sovereign Capital Partners. Financial terms were not disclosed.– Walor North America agreed to acquire TSM, an Auburn Hills, Mich.-based automotive components manufacturer, from HCI Equity Partners and others. Financial terms were not disclosed.

Other

– Tipalti acquired Statement, a Tel Aviv-based AI-powered treasury automation platform for $35-45 million.

IPOs

– Slide Insurance Holdings, a Tampa-based home insurance company, raised $408 million in an offering of 24 million shares (31% from insiders) priced at $17 on the Nasdaq. The company posted $929 million in sales for the year ending March 31, 2025. DC13 backs the company.

People

– Clearlake Capital Group, a Santa Monica, Calif.-based private equity firm, added Josh Lederman as managing director. Previously, he was at KKR.