LambdaTest, a cloud-based software testing platform, has raised $38 million in a funding round as it looks to expand its presence in existing markets and advance its AI capabilities.

The San Francisco and Noida-headquartered startup’s Series D round has been led by Avataar Ventures with participation from Qualcomm Ventures, bringing its total funding to $108 million.

LambdaTest provides infrastructure that lets companies test their applications across more than 5,000 browser and operating system combinations. Rather than maintaining expensive in-house testing labs, companies can use LambdaTest’s cloud platform to validate their software works correctly across different environments. (LambdaTest also maintains labs with thousands of real-devices for testing.)

The investment comes as software testing faces mounting pressure from the rise of AI-generated code. According to LambdaTest’s survey of over 1,600 enterprise teams, only 23% of testing bandwidth is spent on test authoring and planning, with the majority of time consumed by maintenance and operational tasks like fixing broken tests, triaging and debugging, and test environment setup.

The startup’s recently launched KaneAI platform, which it describes as an “AI Native QA Agent-as-a-Service,” aims to automate many of these tedious testing tasks. The system can reduce manual efforts in test script generation by 40-70%. Its HyperExecute platform enables teams to run tests up to 70% faster than traditional cloud grids, with 2.5x faster test resolution and 60% quicker error detection.

For regulated industries like financial services and healthcare, public test cloud infrastructure has been a deterrent, with not all tests or environments able to run outside of company firewalls. LambdaTest’s platform includes enterprise security features and compliance certifications including ISO 27001, SOC 2 Type 2, and GDPR.

“Asad & team are a force of nature to be reckoned with — in a short period of time they have disrupted the entire market,” said Avataar founding partner Nishant Rao in a statement. “From creating the first AI-native, no-code QA solution to launching the only truly e2e Enterprise grade, secure test orchestration platform, they have totally changed the game.”

Founded in 2017, LambdaTest serves over 15,000 customers, including Fortune 500 and G2000 enterprises across sectors like financial services, insurance, travel, retail, and healthcare. Users have executed more than 1.2 billion tests on the platform to date. The startup, which competes with firms including BrowserStack and SauceLabs, plans to deploy the fresh capital to make deeper inroads in its existing markets and also broaden its technology stack.

The startup, which counts Premji Invest, Peak XV Partners and Blume Ventures among its backers, has also developed features like flaky test identification, which PWC reports helped save 40% of time spent on error reporting and analysis. Its test intelligence system offers auto error categorization and smart analytics, along with automatic retries of failed tests and reordering of tests for faster feedback.

“KaneAI is more than a tool—it’s a transformative approach to QA, empowering teams to test smarter and faster, with less manual effort,” said Asad Khan, CEO and co-founder of LambdaTest. “Our foundation in LambdaTest’s cloud-based platform gives us an edge in delivering this solution at scale.”