Decagon Discusses Acquisition, ServiceNow in the Running

Decagon has mandated a bank to explore a potential acquisition and has begun preliminary discussions with several players, including ServiceNow. The company, valued at $4.5 billion earlier this year, may also opt for a new funding round if no agreement is reached. These talks come amid a resurgence of activity in AI, illustrated by the recent acquisitions of Hugging Face and OpenRouter.

ServiceNow Seeks to Reassure After the SaaS-pocalypse

A potential deal regarding Decagon would occur as ServiceNow seeks to reassure investors about its ability to adapt to AI competition in the software sector. ServiceNow's stock fell earlier this year during the "SaaS-pocalypse," a period when investors feared that AI would erode software publishers' margins. The group was also penalized following the announcement late last year of its acquisition of security company Armis for $7 billion. Since then, the stock has rebounded, while ServiceNow continues to invest in AI and adjust certain parts of its business.

M&A in AI: Decagon Tests the Market

Decagon has engaged an investment bank to gauge interest in mergers and acquisitions and is conducting preliminary discussions with potential buyers, including ServiceNow, according to sources close to the matter. If no agreement is reached, the company may consider a new funding round. Its most recent valuation stood at $4.5 billion earlier this year. Fast-growing AI companies often receive offers above their last valuation, suggesting that a potential bid for Decagon could exceed this amount. This move is part of a growing wave of transactions in AI, as tech groups seek to acquire positions in promising markets. Recent transactions include Nvidia's acquisition of Hugging Face for $12.9 billion and Stripe's purchase of OpenRouter for approximately $8 billion.

The Profile of Decagon and Its Financial Backers

Decagon develops AI agents to automate customer support and uses generative AI for companies like Delta, Snapchat, and Ticketmaster. Founded in July 2023 by Jesse Zhang and Ashwin Sreenivas, the company has raised over $400 million from investors such as Andreessen Horowitz, Index Ventures, Bain Capital Ventures, and Accel. It faces competition from Sierra, founded by Bret Taylor and valued at $15.8 billion earlier this year. On November 12, 2025, in Lisbon, Jesse Zhang, co-founder and CEO of Decagon AI, spoke on the second day of the Web Summit 2025.