Observe Inc., the AI-powered observability company, today announced it has closed $156 million in a Series C funding round led by Sutter Hill Ventures with participation from Madrona Ventures, Alumni Ventures, Snowflake Ventures and Capital One Ventures.
Over the past year, Observe has tripled its revenue and doubled its enterprise customer base, achieving an industry-leading net revenue retention of 180%. During this time, monthly active users have also tripled as the platform processed over 150 petabytes of telemetry data. Observe has experienced rapid adoption by large enterprises and modern SaaS and AI-native companies, as they seek to replace traditional tools like Splunk, Datadog, and Elasticsearch due to rising costs and increasing complexity at scale. Its modern architecture combines a cost-effective data lake with a powerful knowledge graph and AI-driven workflows, enabling developers to troubleshoot faster and more affordably.
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“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,” said Binu Mathew, CTO at Tekion. “More than a vendor, Observe has been a trusted partner, consistently helping us evolve our observability strategy to keep pace with our growth.”
Observe’s growth is driven by three trends:
- The data lake is now home base, and enterprises are moving their telemetry data to the lake for scalability and cost-efficiency.
- Context is the new bottleneck. In modern, distributed environments, collecting data isn’t the challenge; connecting it is.
- AI is changing the troubleshooting workflow , helping teams diagnose and fix root causes faster.
“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,” said Dennis Bragfeldt, Chief Architect at Topgolf. “Observe takes pride in their technology foundation, and rightfully so.”
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