Microsoft’s M12 invests another $22.5 million in NeuBird, months after $22 million product round

Late last year, Gou Rao and Vinod Jayaraman founded NeuBird to automate IT site reliability operations tasks with generative artificial intelligence.

Selling the previous cloud-native storage startup, Portworx to PureStorage for $370 millionthe pair were well versed in the IT challenges facing modern businesses.

“It’s very hard to find good site reliability engineers. Rao, CEO of NeuBird, told TechCrunch. “It doesn’t help that the modern IT stack is getting more and more complex. Only people cannot withstand this kind of change.”

To cope with this increased complexity, NeuBird built Hawkeye, an AI-powered SRE that can quickly identify, diagnose and resolve problems, freeing up human engineers for more strategic work.

raising a $22 million seed round In April, NeuBird from Mayfield was not seeking additional funding. But when Microsoft’s venture fund M12 approached about investing, NeuBird couldn’t say no.

Since many of NeuBird’s customers run on the Azure cloud, the partnership could help the company bring its solution to a larger market.

On Wednesday, NeuBird announced a $22.5 million seed round led by M12 with participation from Mayfield, Stepstone Group and Prosperity7 Ventures.

While expansions are often done by companies that don’t grow fast, that certainly wasn’t the case for NeuBird. Rao said NeuBird chose to call the round “seed-1” because it wants to raise larger funding from traditional Series A investors in the future, adding that the valuation for this round was “much higher” than previous funding.

With investors interested, NeuBird is on to something.

Companies can “hire” Hawkeye to search for active signals and alarms continuously throughout the day. After identifying the problem, Hawkeye tries to fix it, but if unsuccessful, escalates the incident to a human engineer.

Hawkeye works using LLM reasoning to check the logs of any system, including custom built systems. “LLMs have seen so many different application configuration scenarios that it’s too small to get an application log line message that an LLM doesn’t understand,” Rao said.

Hawkeye accesses all systems in read-only mode, meaning it does not store any proprietary information of clients. This is important for banks and other organizations that need to protect personally identifiable information.

“Hawkeye does not need to see the application itself or the application data. “We don’t need to see your transaction records,” he said. “All we look at is health information. Are there any alarms? Are there any errors in the notes? CPU too high?”

The company has already managed to attract clients ranging from major automakers, financial institutions, pharmaceuticals and even startups, with about 30 employees and just one IT operations engineer who can’t keep up with event tickets. While some of these organizations are still testing the product, many have moved into production mode over the past few months.

Still, while NeuBird has VCs throwing money at it at high valuations, in a seed round, it’s not the only startup working on AI-powered SRE tasks. Y Combinator only backed three of them in 2024 (SRE.ai, Opslane, Parity) and launched several others like Cleric. Bigger players like Moogsoft also offer automated event response features.

Again, like sales automation and customer service automation, co-pilots or teammatesWhat Mayfield’s managing partner calls NeuBird comes for many developer and DevOps functions. With this level of excitement from VCs, NueBird is one to watch.