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Resolve AI, a startup developing an autonomous site reliability engineer (SRE), a tool that automatically maintains software systems, has raised a Series A led by Lightspeed Venture Partners, according to three people familiar with the deal.

The headline valuation for the fresh round is $1 billion, sources said. However, the company’s actual blended valuation was lower because of a multi-tranched structure. In this setup, investors purchased some equity at a $1 billion valuation but acquired the remainder — likely a larger percentage of the round — at a lower price. This novel investment approach has recently become popular for the most sought-after AI startups, investors say.

The startup’s annual recurring revenue (ARR) is approximately $4 million, two of the people said. The size of the funding round couldn’t be learned.

Resolve AI and Lightspeed didn’t respond to our request for comment.

Founded less than two years ago, the startup is led by former Splunk executive Spiros Xanthos and Mayank Agarwal, Splunk’s former chief architect for observability. The duo’s partnership dates back 20 years to their graduate studies at the University of Illinois Urbana-Champaign. This isn’t their first collaboration; they previously co-founded Omnition, a startup that was acquired by Splunk in 2019.

While human SREs are traditionally responsible for manually troubleshooting and resolving system failures, Resolve AI automates this process by autonomously identifying, diagnosing, and resolving production issues in real time.

The automation addresses a growing challenge for companies. As software systems become more complex and distributed across cloud infrastructure, outfits often struggle to find and retain enough skilled SREs to keep systems running smoothly. Automating these tasks can reduce downtime, lower operational costs, and free up engineering teams to focus on building new features rather than trying to constantly stomp out production issues.

Last October, Resolve AI raised a $35 million seed round led by Greylock with participation from World Labs founder Fei-Fei Li and Google DeepMind scientist Jeff Dean.

Resolve AI competes with Traversal, an AI SRE startup that raised a $48 million Series A led by Kleiner Perkins, with participation from Sequoia.