Observe, an AI-based observability company, has completed a $156 million Series C funding round led by Sutter Hill Ventures, with contributions from Madrona Ventures, Alumni Ventures, Snowflake Ventures, and Capital One Ventures.
In the past year, Observe has tripled its revenue, doubled its enterprise customer base, and achieved a net revenue retention rate of 180%. The platform now processes over 150 petabytes of telemetry data, and its monthly active user count has also tripled.
The company is rapidly gaining traction among large enterprises and modern SaaS and AI-native firms, replacing traditional tools like Splunk, Datadog, and Elasticsearch due to rising costs and complexity. Observe’s architecture integrates a cost-effective data lake, a knowledge graph, and AI-driven workflows for efficient troubleshooting.
Key growth trends include:
- Data lakes serve as central hubs for improved scalability.
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The challenge of effectively connecting data in distributed environments.
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AI transforming troubleshooting workflows for faster root cause diagnosis.
Observe’s platform features:
- O11y Data Lake – A scalable, low-cost data lake for real-time observability.
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O11y Knowledge Graph – A contextual model mapping the entire system.
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O11y AI SRE – An AI system that detects issues and improves instrumentation.
With this new funding, Observe will focus on product development, AI innovation, and global hiring, positioning itself as a leader in AI-powered observability.
KEY QUOTES:
“During a period of explosive growth at Tekion, we realized our existing observability tools weren’t going to scale with us. We had tried major commercial and open-source tools, but both resulted in escalating costs and constant tuning efforts that drained engineering resources. Observe gave us a cost-effective unified platform for logs, metrics, and traces, with the ability to correlate across all of them. That visibility has been critical to maintaining service reliability while scaling aggressively. More than a vendor, Observe has been a trusted partner, consistently helping us evolve our observability strategy to keep pace with our growth.”
Binu Mathew, CTO at Tekion
“Observe is transforming how we approach software observability at Topgolf and Toptracer. The game changers have been the cost-efficient ingestion and the ability to tie telemetry data to a resource model that reflects our architecture. Observe takes pride in their technology foundation, and rightfully so.”
Dennis Bragfeldt, Chief Architect at Topgolf
“Our customers rely on us to unify data from hundreds of sources, which demands a highly scalable and efficient infrastructure. Observe’s data lake-based architecture allows us to scale observability much more easily and cost-effectively than traditional solutions.”
Andrew Katz, CTO & Co-Founder at mParticle
“Observe was the only platform that could cost-effectively handle the scale and complexity of our log aggregation needs. At Dialpad, tracking call performance across our infrastructure is essential for delivering a seamless and reliable communications experience. With Observe, we can now correlate all aspects of a call in one view, allowing our teams to troubleshoot issues up to 30% faster.”
Max Wardell, Sr. Engineering Manager at Dialpad
“Observe gives us the visibility we need across our cloud environment, helping to reduce our mean time to resolution and operational costs, while enabling our security and infrastructure teams to stay ahead of potential issues.”
Oscar Papel, CISO at Truveta
“System resilience begins and ends with full-stack observability. It is foundational for AI, provides visibility into resource utilization and is part of the magic of powering personalized customer experiences. Observe is executing on a bold vision for modern observability, and we’re continuing to invest to fuel their growth as they meet demand.”
Sean Leach, Partner, Capital One Ventures
“Observe understood from the start that AI is only as powerful as the data behind it. As AI reshapes the future of software development, Observe is uniquely positioned to help enterprises build more reliable agents and applications while containing costs at scale. This investment deepens our partnership and underscores our belief in their long-term vision.”
Harsha Kapre, Director, Snowflake Ventures
