Observe has closed a Series B funding round of $115 million led by Sutter Hill Ventures with participation from existing investors Capital One Ventures and Madrona and new investor Snowflake Ventures.
The Series B funding, raised at a valuation 10x higher than the company's Series A round four years ago, promises to further accelerate Observe's growth. In FY2024, ARR increased 171%, TCV increased 194% and NRR, an indication of a product's stickiness, increased to 174% (best-in-class is considered to be 130%). Observe's headcount increased more than 50% and the company is scaling its sales organization as many tech companies pull back.
"Legacy monitoring and APM players, shackled by outdated architectures, are dead companies walking," said Jeremy Burton, CEO at Observe.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 recognized 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 emphasizing 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 organizations, our data volume continues to expand. Observe provides a centralized and pre-correlated data layer that meaningfully organizes telemetry data from many sources at scale, helping drive faster response times."
Observe 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.
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