Conduct has secured $60 million in a Series A funding round from Index, ICONIQ, and SAP.

      A pressing deadline is approaching for corporate IT, leading to an intriguing AI funding round in London. Conduct, a startup with 35 employees founded by three ex-Palantir engineers, has secured a $60 million Series A funding co-led by Index Ventures and ICONIQ, with SAP also investing. This latest round brings the company's total funding to approximately $72 million.

      The firm develops what it refers to as an “AI operating system for enterprise software.” Essentially, it analyzes the millions of lines of custom code within a large corporation's core systems and aligns each component with the corresponding business function it governs.

      The deadline is significant. SAP will cease mainstream support for its widely utilized ECC software on December 31, 2027, and according to Gartner, around 17,000 out of 35,000 ECC customers have yet to transition to new systems. The migration process typically takes 18 to 36 months, indicating that many large companies are facing a critical juncture. This urgency represents the market opportunity for Conduct.

      Interestingly, SAP, which has set the deadline that has created this situation, has appointed Conduct as a strategic partner to assist its customers in moving away from legacy systems.

      Investors are also interested for reasons beyond the impending deadline. Conduct posits that AI agents cannot function effectively in systems that no human comprehends entirely; the extensive customization of these systems has rendered them opaque even to their operators. The idea is that by making the code understandable, a significant amount of hidden enterprise work can be unlocked for automation. This perspective was compelling enough to attract ICONIQ, a backer of companies like Snowflake and Databricks that typically avoids early-stage investments, into a Series A in London.

      However, there are challenges. Conduct claims that customers such as Daimler Truck, Fraport, and DHL are executing transformation projects significantly quicker and asserts cost reductions of 50 to 80 percent during crucial phases, although these figures have not been independently verified.

      Conduct is not the only player in this field; SAP-owned LeanIX, the $13 billion process-mining firm Celonis, and ServiceNow also operate in this arena. Moreover, the rush for SAP migrations is limited. The true challenge will be whether Conduct can establish itself as a lasting solution that extends beyond SAP before the critical deadline arrives.