Milestone Raises $10M to Drive AI ROI

The Rise of Generative AI in Coding and the Need for ROI Tracking

Generative AI is increasingly integrated into coding processes, yet many organizations find it challenging to monitor its utilization and, crucially, determine its return on investment. Israeli company Milestone is addressing this issue with a platform engineered to link AI tool usage directly to key engineering metrics, including the overall quality of the code produced.

Addressing Initial Concerns and Securing Funding

A key requirement for Milestone’s platform is access to client codebases. This initially raised concerns among investors, as CEO and co-founder Liad Elidan explained to TechCrunch. However, the startup has successfully secured $10 million in seed funding, led by venture firms Heavybit (based in San Francisco) and Hanaco Ventures (from Israel), demonstrating investor confidence.

Milestone’s customer base already includes prominent companies like Kayak, Monday, and Sapiens, validating the platform’s value proposition.

An Unconventional Founding Story

The origins of Milestone are somewhat unique. Elidan and the company’s CTO, Professor Stephen Barrett, collaborated for years without ever meeting face-to-face before beginning the fundraising process. Barrett, residing in Ireland, teaches computer science at Trinity College Dublin, where Elidan was previously a student. Their connection was forged through collaborative software projects.

Responding to the Growing Demand for AI-Assisted Coding

Recognizing the increasing prevalence of coding assistants and code-generation tools, the pair decided to establish a startup focused on enhancing engineering efficiency. The adoption of tools like GitHub Copilot has been rapid, exceeding 20 million users. Despite this growth, organizations often lack the insights needed to understand how these tools are being used and their impact on productivity.

The “GenAI Data Lake” Approach

Milestone tackles this challenge by leveraging four core data sources – codebases, project management platforms, team structures, and the AI codegen tools themselves – to create what Elidan terms a “GenAI data lake.” This provides organizations with actionable intelligence regarding AI tool usage and its effects.

This data empowers managers to measure feature delivery speed and determine if AI-generated code is contributing to new bugs, enabling data-driven decisions about tool implementation.

Demonstrating ROI and Encouraging Further Adoption

Milestone’s platform provides a clear view of ROI, answering the critical question of whether AI investments are yielding positive results. Elidan reports that no customer has discontinued AI tool usage after implementing Milestone; instead, they are actively exploring additional AI solutions.

Adapting to a Rapidly Evolving Landscape

The pace of innovation in generative AI is relentless. Elidan notes the progression from auto-completion to chat-based interfaces and now to agentic-based chat, highlighting the need for continuous adaptation.

The Changing Role of Engineers

Professor Barrett’s academic background provides valuable insight into the transformative changes occurring within engineering teams. He suggests that AI is effectively augmenting teams, shifting the role of engineers towards management and oversight. “A lot of the ways we used to think about engineering are going to have to change,” he stated.

Strategic Partnerships and Vendor Integrations

To stay ahead of the curve, Milestone has established partnerships with numerous vendors, including GitHub, Augment Code, Qodo, Continue, and Atlassian. Atlassian Ventures also participated in the seed funding round, underscoring the strategic importance of these integrations.

Support from Industry Leaders

The funding round also attracted investment from prominent angel investors, such as GitHub co-founder Tom Preston-Werner, former AT&T CEO John Donovan, Accenture’s senior tech advisor Paul Daugherty, and Datadog’s ex-president Amit Agrawal. Their involvement demonstrates a broad understanding of Milestone’s relevance to the enterprise market.

A Focused Enterprise Strategy

From the outset, Milestone has maintained a deliberate focus on the enterprise market, even declining potential clients that were too small. This strategic decision, while challenging, has provided clarity around the roadmap and the necessary enterprise-level features. Elidan emphasizes focus as key advice for fellow founders, and Milestone is committed to maintaining this approach, avoiding expansion into areas like marketing analytics.