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It鈥檚 unlikely the term 鈥渄ata observability鈥� gets most folks too excited. Unless they are investors. We鈥檝e seen several startups in the space raise serious cash over the last couple months.

In fact, in the span of one week three companies alone raised more than $400 million. This shows the significance of a sector that helps companies review, evaluate, index and, in general, control what has become the lifeblood of so many large enterprises鈥攖heir data.

Even in a venture market that has taken a downturn, investors took note recently with huge rounds, including:

• On May 24, San Francisco-based raised $150 million in Series D funding led by . Cribl鈥檚 platform allows users to index and search data used to determine the health of a company’s infrastructure and applications.
• That same day, San Francisco-based raised a $135 million Series D led by聽 valuing the company at $1.6 billion. The company helps DevOps teams track data reliability.
• The following week, San Francisco-based continued the party as it closed a $142 million Series D co-led by new investors and . The company provides another way for DevOps teams to analyze data streams.

Those numbers don鈥檛 even count other rounds raised last month, such as: a $70 million Series A raised by San Mateo, California-based performance management tools developer ; a $63 million Series B closed by Seattle-based stream processing platform ; a $35 million round raised by Florida-based data lineage platform , or the $240 million Series D closed by New York-based open observability platform in April.

Data explosion

While all that money may sound surprising, it illustrates the importance of data. Not only in gaining insights and analytics to help businesses get ahead, but also to ensure a company鈥檚 internal infrastructure runs properly and efficiently.

鈥淭here are two major driving forces,鈥� said , CEO of Manta. 鈥淔irst is our stronger bias toward data-driven decision-making, and therefore our growing dependency on data.

鈥淭he second driving force is the complexity of our data infrastructure,鈥� he added.

Many of the startups that have raised cash work in different areas of the observability market. Some check on the health of the data itself or help DevOps team with analysis. Cribl鈥檚 platform helps companies index and search data鈥攅ven over distributed networks鈥攖o help monitor things such as performance and security.

鈥淥bservability shows you the health of your infrastructure and application,鈥� said , a managing director at , which participated in the recent round for Cribl. 鈥淒riving insight from that data is important.鈥�

That is especially true in a world that is only becoming more digitized.

鈥淭here will聽 always be a need to understand the health and security of our systems, it has a direct impact on the health of the business,鈥� said Coralogix CEO .

Funding numbers

Getting hard funding numbers on startups in observability can be difficult, but it is part of the much wider information technology stack that continues to see massive amounts of venture dollars pour into it. Just last year VC-backed IT startups raised more than $56.6 billion鈥攁n all-time high鈥�.

This year may not match it, but it could come close. Through more than five months, the space has already seen $24.8 billion invested.

A growing market

While the observability market is not new in the IT space鈥攖hink of publicly traded companies like and 鈥攏ewer generations of technologies are needed as data increases and the speed it must be analyzed becomes faster.

Raney said he sees significant space to grow as companies’ technological architecture continues to change and needs new solutions..

鈥淲e鈥檝e watched this market for a long time,鈥� Raney said. 鈥淭here鈥檚 high net retention (of customers), which we like.鈥�

While more complex infrastructure and a dependence on data is driving observability鈥檚 growth, the intersection of these two trends can be very dangerous鈥攁nd intriguing鈥攖o investors, said Kratky.

鈥淐omplex systems tend to break, and when they do, due to our data dependency, it can have a catastrophic impact on the organization, which can cost millions of dollars,鈥� he said. 鈥淚nvestors see this trend very clearly.鈥�

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