California-headquartered Observe, a software startup specialising in app system issue detection, has picked up $115 million in Series B funding. The investment round was led by Sutter Hill Ventures (invested in Lacework) with participation from existing investors Capital One Ventures and Madrona (invested in MotherDuck and Doorstead) and new investor Snowflake Ventures.
This latest investment round brings Observe’s total funding to $210 million, showcasing strong support from both new and established investors. As per the company, it took the valuation to 10x higher than the company’s Series A round raised four years back.
The investment is expected to take that work to the next level as Observe takes its observability capabilities into the data cloud, enabling users to better monitor and manage their environment. In addition, the company plans to expand its market presence in North America over the coming year and expects to continue to more than double the size of its business.
What challenge does it tackle?
Today, enterprise technology setups are more complex than before. Many intricate applications run constantly, producing various types of data such as logs, metrics, and traces. In most cases, this data is fragmented, making it necessary for teams to use multiple tools to connect everything and detect issues like application downtime. This challenge is heightened for large organisations with extensive application coverage. This brings opportunity for startups such as Observe that builds tools to put the fragmentation together.
Jacob Leverich, Jonathan Trevor, Philipp Unterbrunner, Jon Watte and Mike Speiser – Executives from Snowflake, Splunk, Wavefront and Roblox saw this challenge in 2017 and started Observe. Their intention was to develop a centralised data lake that could ingest all data in one place and curate it into a data graph for easy analysis. It aims to provide users with relevant context to quickly identify and resolve incidents.
What makes it unique?
Observe distinguishes itself in the competitive market for app system issue detection tools by offering a comprehensive solution that replaces traditional cloud monitoring and analytics services. Its cost-effective services have attracted nearly 100 clients, including notable names such as Capital One, Reveal, and Top Golf. As per the company, in addition to competitive pricing, it also delivers superior performance.
“Legacy monitoring and APM players, shackled by outdated architectures, are dead companies walking,” said Jeremy Burton, CEO at Observe. “As private equity or strategic acquirers strip them down for parts, Observe is taking a new approach designed for today’s modern distributed applications and massive data volumes. We’re thrilled to have investors who are thinking big and validating Observe’s approach in one of the fastest-growing segments in tech.”
“We believe Observe is the future of Observability and we’re incredibly excited to lead the Series B round,” said Mike Speiser, Managing Director at Sutter Hill Ventures. “Observe has built a world class team and delivered a product that is architecturally different to everyone else. The incredible growth in ARR and NRR is testament to the fact that this new architecture is now paying off for their customers.”
“At Snowflake we believe there’s no such thing as an AI strategy without a data strategy,” said Stefan Williams, VP Corporate Development & Snowflake Ventures. “Observe recognised this from the outset and built a data company. Our team has worked closely with Observe as a partner since the company’s founding and with this investment, we’re bolstering that relationship and emphasising our belief in Observe as the company enters its next stage of rapid growth.”
“Capital One is focused on building seamless customer experiences that make banking and commerce simpler and easier — wherever those customers are, digital or in-person,” said Mark Cauwels, Managing Vice President, Enterprise Platforms Technology, Capital One. “Like many cloud-first organisations, our data volume continues to expand. Observe provides a centralised and pre-correlated data layer that meaningfully organises telemetry data from many sources at scale, helping drive faster response times.”
