A $4 Billion Enterprise Software Firm Acquires AI Coding Startup Codegen
This year has been a big one for AI coding startup acquisitions. Who can forget the dramatic Google-Windsurf-Cognition saga from this summer? And this month alone, Anthropic acquired developer tool startup Bun and Cursor bought code review startup Graphite.
Another coding deal is sneaking in before the end of the year. ClickUp, a $4 billion-valuation enterprise software startup, is acquiring AI coding startup Codegen, the companies told The Information exclusively.
The companies didn’t disclose the terms of the deal. Two-year-old Codegen previously raised $16.2 million in funding from investors including Thrive Capital, Quora CEO and OpenAI board member Adam D’Angelo, and Anthropic Chief Product Officer Mike Krieger and was last valued at $60 million. It was one of the earliest startups that attempted to build autonomous coding agents that could complete a coding task with little human oversight, rather than code autocomplete tools.
Founded in 2017, ClickUp in September announced that it had passed $300 million in annual recurring revenue, and its customers include Nvidia, Pfizer and Deloitte, according to the company.
ClickUp aims to offer businesses any sort of enterprise software they might need, from workplace messaging to wikis that allow them to search through workplace policies to customer-relationship management, all in one place. It hopes to use Codegen’s tech to bolster its new agent product, which uses AI to help customers automate tasks like writing marketing copy, generating daily status reports for projects and checking code for bugs, CEO Zeb Evans said. The product runs within the main ClickUp app.
If there’s one thing we’ve learned in recent months, though, it’s that using agents is a lot easier said than done. Large companies like Salesforce and Microsoft have struggled to sell agents to businesses or even get them working in the first place.
Evans acknowledges that this has been an issue but says a big reason is that workers don’t know how to use agents correctly. For instance, people aren’t used to manually typing out all the background information an agent would need to understand an ongoing project, like how long the project has been going on for or the people involved, he said.
Another obstacle is that agents can have trouble tapping information located in different enterprise apps, which can happen with businesses that use dozens or even hundreds of software providers, Evans said. Because ClickUp consolidates all kinds of software into a single app, its agents don’t have that same problem, he said.
AI agents can also struggle to remember information they’ve seen in the past, such as information in a Slack channel about a change to a vacation policy or a customer’s preference to respond more concisely to queries. ClickUp has addressed this by providing its agents with a “working memory”—essentially, a document where the agent can take notes about, for instance, tasks that the customer needs completed on a daily or weekly basis or the written tone that customers want them to use, Evans said.
In the long run, Evans believes that agents tailored to specific roles or tasks, like accounting or coding, will be replaced by more general-purpose agents which will be able to handle a variety of tasks. We seem to be a long way from that point. But if it happens, it would be bad news for specialized AI software providers, such as Harvey in legal, Cursor in coding and Rogo in financial services.
One question is whether Google or Microsoft are better set up to provide such AI agents in the long run, given the array of enterprise apps and services they already provide.
Evans argues that ClickUp has the speed of a startup on its side. We’ll see how that measures up to big tech companies’ deep coffers and existing customer base.
Let the agent games begin.