Legacy code modernization startup Kodesage Ltd. said today it has closed on a $6.6 million seed funding round to accelerate its mission of helping enterprises transform their on-premises software stacks.

The round was led by VentureFriends and saw participation from Portfolion and a couple of notable angel investors: Google Scholar Christian Szegedy, who helped Elon Musk found xAI Corp., and Mario Götze, the German international footballer and former World Cup winner.

Kodesage is building an artificial intelligence platform that helps businesses to extract information from the code of their most complex legacy software stacks. This information is fed into a live “knowledge layer” that can be used to rebuild critical applications in modern programming languages with minimal hassle and zero risk.

According to co-founder and Chief Executive Gergely Dombi, Kodesage can fully automate the discovery of legacy codebases, generate and maintain documentation and then facilitate migration operations with context-aware code conversion and automated test development. He said he built Kodesage along with his friends Miklos Szurdi and Gyorgy Szilagyi after previously establishing a 300-plus-person software consulting firm that specialized in modernizing legacy software systems. Because they were human-led, the consultancy’s projects were almost always slow affairs, reliant on the expertise of just one or two experts in the targeted systems.

The three co-founders eventually realized the potential of AI to transform the application modernization process through automation and make it repeatable and therefore much more scalable. Upon that realization, they set about actually building the AI platform to do it.

Kodesage’s technology is designed especially for highly regulated industries such as financial services, insurance, healthcare, transportation, energy and telecommunications, where many mission-critical workloads still run on on-premises software that was built decades ago. Because the code is now outdated, modernizing these applications and migrating them to the cloud really means rebuilding them from scratch, and it’s an enormously complex task.

The startup is not the only AI-native application modernization game in town, but it sets itself apart with its data sovereignty-friendly nature. Whereas other services use cloud-based AI to try to modernize code, Kodesage knows that its target customers store much of their business logic in databases that cannot be exposed to public cloud services for regulatory reasons.

Kodesage gets around this by operating entirely within the customer’s environment, either on-premises or in virtual private clouds or fully air-gapped clouds, ensuring that their sensitive information never escapes their control. A side benefit of this novel architecture is that customers can enjoy more predictable and transparent costs that are decoupled from token consumption.

According to Dombi, support teams are coming under immense pressure because many of the people who helped to create and maintain those legacy systems have now retired. Because they’re written in such ancient programming languages, very few people understand how to maintain them. “Software modernization is rarely clean-cut, and in regulated environments, legacy and new systems often coexist for years while the support burden grows as institutional knowledge thins out,” he said.

Kodesage’s goal is to reduce the operational pressure on those support teams by modernizing legacy systems written in Oracle Forms, PL/SQL, COBOL, PowerBuilder and RPG code. Essentially, it enables those systems to be rebuilt in more modern programming languages and automates ongoing maintenance work. “Our vision is self-healing enterprise applications: systems that can continuously learn, propose, test and validate fixes, with engineers guiding outcomes rather than diagnosing problems and writing code from scratch,” Dombi explained.

The money from today’s round will help Kodesage to accelerate its go-to-market plans in the U.S. and Europe and expand its engineering and product teams to achieve that vision, Dombi added.

“Numerous enterprises globally are struggling to maintain and upgrade legacy software systems that reside on-premises,” said VentureFriends Founding Partner Apostolos Apostolakis. “Starting with Oracle applications, Kodesage can help companies understand, maintain and modernize complex, undocumented legacy codebases. As a result, they save them time and cost while cutting their dependence on retiring experts.”

Image: Kodesage