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Observability platform Observe raises $50M in debt, launches gen AI features

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Venture investors see potential in observability software — i.e. software that gives teams the ability to monitor, measure and understand the state of a system or app. And that’s not surprising. The observability market is forecasted to reach $2 billion by 2026, climbing from $278 million in 2022, according to 650 Group.

The growth is perhaps because of the software’s perceived benefits. A 2022 survey from Enterprise Strategy Group found that advanced observability deployments can cut downtime costs by 90%, keeping costs down to $2.5 million annually versus $23.8 million for observability “beginners.”

In any case, vendors like Observe are riding high.

Observe, which develops software-as-a-service observability tools for storing, managing and analyzing machine-generated data and logs, has raised $50 million in convertible debt (i.e. debt that converts to equity) led by Sutter Hill Ventures. The financing will be used to grow Observe’s sales and R&D teams, according to CEO Jeremy Burton, as the company looks to expand its headcount from 150 employees to 250 by the end of 2024.

Burton says that the decision to opt for debt funding was in the interest of deferring dilution.

“We expect to raise the Series B early next year, at which time the debt will convert to equity,” Burton told TechCrunch in an email interview. “We’ve run the company off of debt financing for the past three years.”

San Mateo-based Observe, which was founded in 2017 by Jacob Leverich, Jon Watte, Jonathan Trevor and Philipp Unterbrunner, stores all raw observability data in a data lake, a centralized repository. It curates and layers analytics on top of this data through what Burton calls a “data graph,” ostensibly making it easier for users to navigate and understand the data.

Observe competes with app monitoring software; monitoring and log analytics tools like New Relic, Splunk, Datadog and Sumo Logic; and new entrants to the observability space such as Grafana, Chronosphere and Honeycomb. But it’s launching new tools and capabilities to stay ahead of the curve.

Burton claims that Observe is now capable of ingesting over a petabyte of data per day into a single customer’s instance while providing a “live” mode for interactive debugging. And, as of this week, Observe offers a range of generative AI features designed to expedite specific observability tasks.

Observe

Image Credits: Observe

For example, Observe’s new GPT Help module, basically a chatbot, responds to natural language commands about Observe’s features, “how-to” tasks and error messages. Meanwhile, GPT Extract parses data to add structure to logs on the fly. GPT Slack Assistant embeds into Slack to help users troubleshoot issues and summarize threads for incident response. And OPAL Co-Pilot generates Opal code — Observe’s query language — in response to natural language inputs.

Now, do organizations investing in observability want all this trendy generative AI stuff? It’s possible. Burton seems to think so, for what it’s worth.

“As organizations become increasingly digital, the volume of telemetry data generated by modern distributed applications is exploding,” Burton said. “Legacy tools weren’t designed for either the volume of data or the complexity of investigating unknown problems in production … But since its founding, Observe has viewed observability as a data problem — if data used to troubleshoot could be stored in one place and reasoned about in a single tool, users would be able to solve problems much faster.”

Generative AI isn’t all that’s new in Observe’s platform. The company’s introducing Observe Apps, prebuilt packages containing Observe configurations and best practices for observing specific dev environments. And Observe’s launching a public API and command line interface, alongside options to export data to a CSV file or a Snowflake dashboard for further analysis.

Burton admits that the economic downturn and pandemic forced Observe to shift its go-to-market approach, with an increased focus on companies with 200 to 2,000 employees. But he claims that this led to success in the end, bringing Observe’s client base to over 60 brands and around 1,600 monthly average users.

“Over the past year, we’ve moved the sales team up to larger accounts and that has resulted in much higher average sales prices and less churn,” Burton said. “While we’re not disclosing annual recurring revenue at this time, what we can share is that Observe has already surpassed its new annual contract value plan for 2023.”

Will generative AI and a platform refresh take Observe to new heights? Perhaps. Or maybe it’ll simply enable Observe to stay a disciplined, measured-growth course, which isn’t necessarily a bad thing.



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Where Did Earth’s Oceans Come From? Scientists Say They Originated From Comets

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Scientists have long debated how Earth became rich in liquid water after the planet formed about 4.5 billion years ago. Now a new research published in Science Advances suggests that comets, particularly those from the Jupiter family, may have played a significant role in delivering water to Earth.

The study focused on Comet 67P/Churyumov-Gerasimenko, a celestial body that belongs to the Jupiter family of comets.

Using data from the European Space Agency‘s (ESA) Rosetta mission, researchers analysed the molecular structure of water on the comet and found striking similarities to the water in Earth’s oceans. This discovery strengthens the theory that icy comets and asteroids crashing into Earth contributed to the formation of its oceans.

The ratio of deuterium to regular hydrogen in the water is a key signature which is the basis of the study. Deuterium is a heavier isotope of hydrogen and it forms heavy water.

Previous studies had shown that the levels of deuterium in the water vapour of many Jupiter-family comets closely matched those found in Earth’s water. To explore this connection further, NASA planetary scientist Kathleen Mandt and her team used advanced statistical techniques to analyse data from Comet 67P.

The findings revealed that deuterium-rich water was more closely associated with dust grains around the comet than previously understood. Because water with deuterium is more likely to form in cold environments, there’s a higher concentration of the isotope on objects that formed far from the Sun, such as comets, than in objects that formed closer to the Sun, like asteroids.

Measurements within the last couple of decades of deuterium in the water vapor of several other Jupiter-family comets showed similar levels to Earth’s water.

This discovery not only strengthens the idea that comets helped deliver water to Earth but also provides valuable insight into how the early solar system formed. By studying the molecular makeup of comets like 67P, scientists can better understand the processes that shaped our planet and its oceans billions of years ago.

Mandt expressed her excitement about the results, saying, “This is just one of those very rare cases where you propose a hypothesis and actually find it happening.” The research also shows how studying comets can help unravel mysteries about the building blocks of the solar system.

ALSO SEE: Uranus Is Hiding 8000-Km Deep Ocean? New Study Presents Thrilling Hints

ALSO SEE: Webb Telescope Sees World That Could Reek Of Burnt Matches And Rotten Eggs

(Image: NASA)





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Chainalysis permanently parts ways with its founding CEO

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Michael Gronager, the co-founder and longtime CEO of Chainalysis, has agreed to leave the company permanently, two months after taking a temporary personal leave of absence.

Chainalysis, a buzzy 10-year-old, New York-based blockchain data platform, will now be led by co-founder Jonathan Levin, as Levin told TechCrunch, explaining that on Tuesday, its board of directors gave him Gronager’s job. But Levin, who has long served as the outfit’s chief strategy officer, will do more than run the company as CEO; he will also maintain his other roles.

“I’ve been running R&D, and I think the CEO should be the chief product officer, so I’m making no changes to our R&D leadership team; it will continue to report directly to me,” he said in an interview on Wednesday.

Levin declined to provide more information about Gronager other than to say that Gronager is also no longer on the Chainalysis board but retains his equity in the company.

A message to Gronager on Wednesday from TechCrunch went unreturned.

Asked about Chainalysis’ financial health, Levin said the startup is “continuing to invest in our growth,” and that “we don’t need to raise capital. We raised $175 million in 2022 and [still] feel strong about the cash position of company.” He added that his focus will be on “executing, the expansion of our risk platform, and going deeper with our government clients across the world to ensure they can deal with the increased demand of crypto.”

Chainalysis, whose early investors include Benchmark, was valued by investors at $8.6 billion during that 2022 funding round. Crypto investor Katie Haun, who first discovered Chainalysis in her capacity as federal prosecutor, reportedly began buying up secondary shares of the company at a valuation of $2.5 billion this past April.

Considered a “crypto detective,” one whose clients include the U.S. government and a wide range of corporations, Chainalysis in late 2023 laid off slightly more than 15% of its staff of 900, with plans to focus more squarely on government contracting, according to The Block.

The entire crypto industry has been in bounce-back mode in more recent weeks, as the incoming Trump administration signals a far friendlier stance toward digital currencies. The most obvious proof point: The price of bitcoin reached a record high of $100,000 on Wednesday.

Above: Levin at a StrictlyVC event hosted by TechCrunch in November 2024.



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Zopa, the UK neobank, snaps up $87M at a $1B+ valuation, eschewing the IPO route

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Some believe Klarna’s planned IPO in 2025 could set the stage for other fintech startups to go public. But with the tech IPO market still sluggish, one of the candidates hotly tipped to follow suit has instead just announced a fundraise, and its CEO says going public is “not a priority.” Zopa, the U.K. neobank […]

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