Companies of all sizes recognize the possibility of changing the game of AI. Despite excitement about new technology, most of their pilot projects don’t produce it.
Gruve.ai, a startup founded by the team behind Rahi Systems, aims to help businesses get AI solutions from the testing stage to real-world applications by using AI to provide services.
Rahi Systems is an IT solutions company acquired by Wesco in 2022 for $225 million.
IT services companies, including major players like Accenture, have been go-to consultants for implementing new technology projects for businesses when they don’t have skilled staff in-house. However, given their work depends on humans, their expertise often comes with a steep price tag.
“The technology services industry hasn’t been confused over the last 25-30 years,” Gruve CEO Tarun Raishi told TechCrunch. “AI really changes that dynamic.”
Gruve wants to change the traditional IT consultant model in two important ways: First, by reducing the need to employ large staff of consultants using repetitive tasks using AI agents. Secondly, by charging clients based on usage rather than hourly.
In the past, VCS has generally not been interested in investing in IT services, as these companies have generally been difficult to expand due to their reliance on human labor. However, Gruve can provide 70% to 80% software-like gross profits by using AI agents instead of human consultants. This is significantly higher than traditional technology consulting margins, said Navin Chaddha, Mayfield’s managing partner.
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Gruve’s innovative model and the experience of its team helped build Rahi Systems raise the $20 million Series A round led by Mayfield, with participation from Cisco Investments and other investors. Fresh Capital brings Gruve’s total funding to $37.5 million.
Raishi said his team will first meet with clients to determine their AI needs and prepare the data to support AI applications before recommending and implementing AI solutions.
“Because the business processes are different and the workflows are different, you need to understand before implementing your client’s business. The way clients serve differently,” he said.
However, once Gruve is ready to deploy, AI agents handle tasks like detection of security violations and migrating from on-premises to cloud CRM.
Like traditional IT consultants, the company partners with a choice of trusted technology vendors to implement solutions for its clients. Gruve’s current partners include large companies such as Cisco, IBM’s Red Hat, and Google, as well as around 12 AI native startups such as Glean and Stabority.
However, unlike most technical consultants, Gruve does not bill clients when the solution is first implemented. Their “services are available on demand, just as electricity is provided, or in the same way cloud computing is provided,” Chaddha said. For example, if Gruve implements AI for security, the company only bills the client for security breaches detected and analyzed by the installed AI.