Observe, the SaaS observability company, recently announced the closure of a $50 million Series B funding round led by Sutter Hill Ventures, with participation from existing investors Capital One Ventures and Madrona and new investor Snowflake, bringing the company’s valuation to $325 million.

“Legacy monitoring and APM players, shackled by outdated architectures, are dead companies walking,” said Jeremy Burton, CEO at Observe.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 thrilled to have investors that are thinking big and validating Observe’s approach in one of the fastest growing segments in tech.”

The Series B funding, raised at a valuation 10x higher than the company’s Series A round four years ago, promises to 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 50%+ and the company is scaling its sales organization as many tech companies pull back.

This new funding builds on Observe’s momentum, including the release of Project Hubble — scaling to over one petabyte per day and delivering the latest GenAI innovations such as O11y GPT and OPAL Co-Pilot — along with the recent launch of Trace Explorer, a powerful new environment for analyzing distributed tracing data. 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.