San Francisco-based startup Distyl AI, co-founded by Arjun Prakash and Derek Ho has raised $175 million in a Series B funding round at a valuation of $1.8 billion. This valuation marks a 9x increase since its last funding round just 10 months prior, when it raised $20 million at a $200 million valuation. Co-led by Khosla Ventures and Lightspeed Venture Partners, the round saw strong participation from Coatue, Dell Technologies Capital, and DST Global.
Distyl’s total fundraising since inception now exceeds $200 million, underscoring investor confidence in its approach to enterprise AI deployment. Founded in 2022, the company has rapidly positioned itself as a leading partner helping Fortune 500 companies become truly “AI-native.”
Distyl AI’s journey reflects the growing demand for AI solutions that move beyond experiments and pilot projects to actually make a meaningful difference in business outcomes. The company reported a 5x revenue growth in 2024 and projects an 8x increase in 2025. They also boast an impressive reach, with its AI systems having impacted more than 120 million end users since its launch.
“Our belief is that the next chapter of AI leadership won’t be won by the models alone, but by operationalizing AI at scale in enterprises and transforming how they work,” said CEO Arjun Prakash. He explained that the companies that will truly succeed are those willing to rethink how they operate from the ground up, not just those who adopt the latest tools.
Distyl works across industries including healthcare, telecommunications, insurance, manufacturing, and financial services, where they integrate AI directly into core business processes to accelerate decision-making, reduce costs, and improve outcomes.
Building for Impact
At the heart of Distyl AI’s offering is their proprietary Distillery AI Engine, a powerful platform that brings AI agents directly into an enterprise’s existing systems and workflows. This engine automates previously manual, complex tasks by studying business operations and converting them into what Distyl calls “AI routines.” Unlike traditional consulting models that involve lengthy engagements and slow rollouts, Distyl claims its AI solutions can be deployed in weeks, not months or years.
The Distillery engine taps into a customer’s proprietary data, allowing the AI agents to possess domain-specific organizational knowledge essential for effective work. This design also prioritizes transparency and control by providing comprehensive observability into every AI workflow. Companies can track every input and output and gain insights into the AI’s decision-making processes.
To ensure reliability, Distyl rigorously evaluates each workflow both for correctness and performance, implementing model guardrails to prevent the AI from generating erroneous or “hallucinated” data.
Co-founders Ajay Prakash and Derek Ho bring a wealth of experience from their time at Palantir, where they helped build some of the most complex data platforms. They’ve assembled a talented team of AI engineers and researchers from top companies like OpenAI and Apple, creating what many describe as the “SEAL Team Six of AI engineering.” This collective expertise has earned Distyl a reputation as the go-to consultancy for enterprises fed up with AI pilots that never seem to deliver real results.
Their close collaboration with OpenAI to deploy advanced foundation models at scale has been a key differentiator. Through this collaboration, Distyl has landed high-profile clients such as T-Mobile USA and other Fortune 500 firms, delivering rapid, measurable value.
Their successes speak volumes. For instance, a hardware manufacturer sped up its supply chain root cause analysis by 80%, while a healthcare player saved over $23 million annually by streamlining analyst investigations.
Addressing The Growing Demand
Distyl’s meteoric rise is due to the broader market opportunity. The global enterprise AI market size was $98 billion in 2025 and is expected to reach $558 billion by the end of 2035, rising at a CAGR of 19%. Distyl’s uniquely “AI-native” approach, rethinking workflows from the ground up with AI as an active work partner rather than mere assistants, positions it to capitalize on this expansion.
Unlike typical consulting firms that focus on pilots or proofs of concept, Distyl builds AI systems designed to scale and deliver real, measurable impact that can transform Fortune 500 companies. Their approach tackles one of the biggest challenges in enterprise AI today: moving beyond experiments to driving tangible business results.
CEO Arjun Prakash stated that the company will use the new capital to accelerate team growth, enhance the Distillery platform, and broaden strategic partnerships with AI developers. This infusion is critical for sustaining innovation and supporting the scaling needs of their large enterprise clients.
Investors like Lightspeed’s Raviraj Jain have praised Distyl’s ability to deliver real innovation and results, calling the company “an essential partner for any large firm aiming to stay competitive in this AI-driven market.”
