Observe continues to adapt to the changing world of software observability

Observe, an observability platform, was founded in 2017 in response to the changing nature of software observability. Companies started pushing out new versions of their software more frequently — and producing significantly more data because of it.

Now, Observe is responding to the latest big shift in technology: AI.

San Mateo-based Observe helps companies get an inside look at the status of their software, which makes it easier for engineers to spot and solve disruptions and outages.

The recent advancements in AI are both a blessing and a burden for the company. Observe’s observability product incorporates AI agents to help make finding and fixing issues faster for its customers. But advancements in AI mean companies are shipping software even faster than before and seeing their data balloon because of it.

CEO Jeremy Burton told TechCrunch that with the continual advancement of AI agents, observability continues to get more complex.

“In a few years, you’re going to have hundreds or thousands of agents on your network that are all interacting with employees or interacting with each other,” Burton said. “That’s all great until something goes wrong, and you’ve got to try and, you know, do a Sherlock Holmes and figure out who done it, you know?”

But Observe is adapting to how the industry is changing, Burton said. The company released a Model Context Protocol (MCP) server earlier this year that allows developers to access their observability data from AI coding tools and LLMs. This is to help meet developers where they are already working, Burton said, and help them accomplish tasks easier.

“We have customers already that are using the MCP server and really trying fairly radical workflows,” Burton said. “They’re sitting in their development environment, and they say, ‘Hey, take a look at this ticket. Use Observe to go figure out what’s happening, and then describe to me the code that you think is problematic, and then suggest the effects.’ That would have been in the realm of science fiction even a year ago.”

The company is also working toward supporting Apache Iceberg, an open source data table format that allows businesses to own and standardize their own data. Burton said companies really like that approach, and Observe expects to be able to support that format by the end of the year.

The company’s revenue nearly tripled in 2024, and it saw 93% gross retention of its customers, although Burton declined to share specific numbers. The company counts large enterprises, including CapitalOne, Paramount, and Dialpad, as customers.

Observe raised $156 million in a Series C round led by Sutter Hill Ventures with participation from Madrona Ventures, Alumni Ventures, and strategic investors like Snowflake, among others.

The company will put the capital toward research and development and hiring. Observe hopes to roll out its private preview for Apache Iceberg support shortly.

“We’ve got a couple of really good things out there, but I feel like we’ve just gotten started,” Burton said.