Elastic agrees to buy DeductiveAI for up to $85 million, report says

In short: Elastic has agreed to acquire DeductiveAI, a young startup that uses AI to find and fix software problems, for up to $85 million, according to a report.

What happened

TechCrunch reports that enterprise software company Elastic has agreed to buy DeductiveAI for up to $85 million. The information comes from a person said to have knowledge of the deal.

DeductiveAI was founded in 2023. It uses AI to catch and resolve bugs, which are mistakes in software code that can cause apps and websites to break. Think of it like an automated helper that spots issues and suggests fixes before a human has to hunt them down.

Neither Elastic nor DeductiveAI responded to TechCrunch’s requests for comment. The report says Elastic may fold DeductiveAI’s tools into its “observability” products, which are tools that help teams watch their software systems and quickly spot problems (like a dashboard that shows warning lights when something is going wrong).

DeductiveAI raised a $7.5 million seed round last year led by CRV, with participation from Databricks Ventures, Thomvest Ventures, and PrimeSet, according to the report. PitchBook put the startup’s valuation at $33 million at the time. TechCrunch also reports DeductiveAI reached about $1 million in annual recurring revenue, which is subscription revenue that repeats each year.

Why it matters

When software fails, everyday services can fail with it, like shopping checkouts, banking apps, and work tools. If Elastic can use DeductiveAI’s technology to detect and fix issues faster, it could help companies reduce outages and downtime that end up affecting customers.

Source: TechCrunch AI