Cloud-native observability startup Chronosphere Inc. said today it has closed on a $115 million round of funding that brings its total amount raised to $343 million.
The Series C round was led by new investors GV and Geodesic Capital, bringing the company’s valuation to $1.6 billion. Existing investors, including Addition, Founders Fund, General Atlantic, Greylock, Glynn Capital and Lux Capital, also participated in the round.
The New York-based startup is the creator of a cloud observability platform that analyzes the data generated by customer’s information technology assets, with the goal of spotting technical issues before they become a serious problem. Chronosphere’s software is based on the open-source M3 system that its founders developed while working at Uber Technologies Inc. It’s said to be quite scalable, capable of ingesting billions of data points that describe the state of the most complex IT environments.
Chronosphere’s platform adds features not found in the open-source M3. Administrators have access to controls that allow them to regulate what and how much information is processed, which helps limit the infrastructure costs associated with data processing initiatives. The platform is delivered as a managed service that spares IT teams the hassle of manually maintaining a deployment of the M3 system.
Chronosphere is looking to win over enterprises from the open-source Prometheus tool, one of the industry’s most popular IT monitoring platforms. The company argues that, though useful, Prometheus suffers from reliability issues when analyzing large volumes of data, which causes problems for larger enterprises with more sprawling IT estates. Chronosphere, on the other hand, says its platform is perfect for large-scale IT environments.
It’s an argument that appears to have won over not only investors, but also a growing number of customers. Chronosphere said today that the funding round comes after a record year during which it tripled its annual recurring revenue and staff headcount, while attaining more than 145% in net revenue retention. That’s a metric that measures how much revenue the company can squeeze out of its existing customer base. It didn’t provide more specifics. At the same time, it chalked up some big customer wins with the likes of Robinhood Financial LLC and Snap Inc. joining a client list that already included Zillow Inc., Visa Inc. and DoorDash Inc.
One reason Chronosphere has persuaded so many companies to use its platform is the savings it offers them. The company cited a recent study by Forrester Consulting Inc., performed on its behalf, that looked at the cost savings and business benefits enabled by its platform. According to that study, the average customer returned $7.9 million in cost benefits over three years, plus an average of $4.9 million in cost savings.
Holger Mueller of Constellation Research Inc. said it’s encouraging to see such big-money investments being made in the new year. “It’s good too that the money is going into the cloud observability space, as this is a nascent and very relevant area of automation,” he said. “Enterprises desperately need better tools to keep an eye on their cloud workloads.”
GV Partner Sangeen Zeb said he’s backing Chronosphere because the company has “cracked the code” required to tame the data generated by the most complex IT environments.
“This funding underscores the crucial market need for powerful cloud native observability solutions to generate positive business outcomes — especially critical now as companies seek more efficient and effective ways to improve customer experiences,” said Chronosphere co-founder and Chief Executive Martin Mao (pictured, left).
Mao, along with Chronosphere Head of Product Jeff Cobb, stopped by theCUBE, SiliconANGLE Media’s mobile livestreaming studio, at the KubeCon + CloudNativeCon NA 2022 in October to discuss the latest technologies Chronosphere has deployed to combat observability data sprawl: