SaaS observability company Observe nabs $70M

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Observe, a software observability platform for SaaS companies, has raised $70 million in a “series A-2” round of funding.

Observability, for the uninitiated, is all about measuring the internal state of an application by monitoring raw telemetry data, such as metrics, logs, and traces. This can help companies better understand why their software is lagging or otherwise underperforming in a production environment, and thus take action to avert customer churn. The space includes companies spanning log analytics, application performance management (APM), and infrastructure monitoring.

“Today’s software applications are architected very differently — they are cloud-based, highly distributed, and new releases go out every day,” Observe CEO Jeremy Burton told VentureBeat. “When something goes wrong, this increase in complexity, combined with the sheer amount of change going into production, can be overwhelming to solve quickly.”

And this is something that Observe is going all-in on to fix.

Data silos

There has been a flurry of activity across the broader observability sphere of late, with the likes of ServiceNow snapping up Lightstep; IBM buying Instana; and Datadog acquiringSqreen and Timber. New Relic and Dynatrace, meanwhile, continue their battle for dominance in a market that Observe says is worth at least $20 billion.

Since it exited stealth back in 2020 with around $35 million in funding, Observe said that it has secured fifty paying customers, most of which are smaller SaaS firms running on AWS and Kubernetes. However, Observe does claim a handful of bigger customers, including Upstart Financial, OpenGov, and Audiboard, while it said that it’s “working closely” with the likes of Capital One and F5 to develop new enterprise features.

But in what is clearly a competitive space, how is Observe looking to carve out its own niche? Well, according to Burton, it’s all about helping companies filter through the volume of telemetry data that they generate, and circumvent the data silos created by the multitude of tools that they use.

“Users experience problems with mobile or online applications every day — performance slowdowns, errors and even outages,” Burton said. “Engineering teams can spend up to half their time on ‘unplanned work’ investigating and fixing these problems. It takes so long because the telemetry data that they use to analyze the problem is siloed — and specialized tools are used to look at each silo.”

And so Observe promises to eliminate these data silos with a single interface for troubleshooting problems at “an order of magnitude faster,” according to Burton.

“A good analogy — this is similar to how the iPhone combined a camera, web browser, and phone into one device,” Burton said. “We’re doing the same for log analytics, monitoring, and APM. It makes for a better user experience for the user… and they save money by not having to buy three devices.”

Under the hood, Observe said that it stores all telemetry data in a single Snowflake database, rather than individual data stores, and then transforms all this machine-generated telemetry data into a graph of related datasets that makes it easier for humans to comprehend — such as “customers,” “shopping carts,” “containers,” and so on.

“This means users can quickly access related contextual information for the problem they are investigating,” Burton said.

On top of all that, Observe said that it charges on a usage-basis, rather than by volume of data or number of users.

“Our system is fully elastic and the customer only incurs cost when they are analyzing data,” Burton added.

Observe’s series A-2 round included investments from Capital One Ventures, Sutter Hill Ventures, and Madrona Ventures.

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