Rocket Software to Acquire Israeli Startup Geniez AI for $100M
American giant Rocket Software is acquiring the 14-month-old Israeli startup Geniez AI for up to $100 million. The six-person team developed AI agents that streamline mainframe operations for major US banks.
The Israeli high-tech industry regularly sees acquisition deals, but the transaction unveiled today stands out as exceptionally unique, even by the dynamic standards of the tech sector. American company Rocket Software is acquiring the young Israeli startup Geniez AI in a massive deal that could reach approximately $100 million, according to a report in The Marker.
A Lean Model and Rapid Growth
What makes the deal so extraordinary is the fact that Geniez AI was founded just fourteen months ago, in September 2025. The company employs only six people, with just two located in Israel, presenting an extremely lean and agile model of technological development.
Behind the young startup are two well-known industry entrepreneurs: CEO Gil Peled, an alumnus of the IDF's Mamram unit with extensive experience in mainframe computers, and Dan Sheprung, former Chief Revenue Officer of Model9. Previously, the two already recorded a successful exit when they sold Model9 to BMC for roughly $40 million after seven years of operation.
An interesting detail is that Rocket Software, currently controlled by international investment fund Bain Capital and specializing in IT infrastructure modernization, previously competed to acquire Model9 but lost the race. When Peled and Sheprung approached them about a year ago with an offer to participate in Geniez AI's initial funding round, Rocket refused. However, after only eight months, once the American giant realized the pace of growth and market penetration of the technology, they returned with an offer for a full acquisition.
Solving the Mainframe Challenge with AI
The reason for the high valuation of such a small company lies in a massive challenge faced by the world's largest financial organizations. Banks and fintech giants still manage their core operations on mainframe computers—powerful yet outdated and complex systems. Due to strict regulatory considerations, data privacy, and security risks, migrating these systems to the cloud takes years and costs billions of dollars.
Geniez AI has developed artificial intelligence agents (AI Agents) that allow these corporate giants to manage and decipher mainframe operations. The unique development allows reliance on advanced language models such as those from OpenAI and Anthropic, while creating a security wrapper that completely prevents the leakage of sensitive data outside the organization.
The technological solution managed to gain a particularly rapid foothold, securing contracts and pilots with three of the largest banks in the United States within just a few months.
Financial Success for the Founders
At the beginning of its journey, Geniez AI raised a relatively modest seed round of just $6 million, led by StageOne Ventures and American fintech fund Canapi Ventures. Because the initial funding was limited, the founders and employees held a significant stake in the company's shares.
This means that even if the final acquisition sum is influenced by future milestones, the founders and the compact team are expected to record financial profits of tens of millions of dollars.
The company explains that the ability to achieve these milestones with a team of only six people stems from an innovative AI-native development approach, where each employee utilizes dozens of models simultaneously—a process that previously required dozens of additional engineers. The integration with the financial backing and marketing explosion of Rocket Software is expected to provide banking clients with the certainty required for wide-scale technology implementation.