Collecting and processing massive amounts of operational data – logs, metrics, traces – that observability and security systems generate has been a particularly pernicious issue for enterprise IT. Not only is the cost and complexity of managing this data increasing every year, AI adoption is accelerating this given the massive volumes of data it generates, especially logs. The exciting thing is that those same advances in AI can also be used to rebuild the observability data pipeline! And that’s why we are excited to announce our investment in Observo AI’s $15 million seed round, led by Lightspeed and Felicis Ventures.
When we first met the founders, Gurjeet and Ricky Arora, what immediately stood out was their deep product and engineering expertise from their time at Rubrik, another Lightspeed portfolio company. At Rubrik, the team built a fully automated, AI-native observability pipeline which helped reduce the spend on Rubrik’s Elastic cluster by 80%, while improving the ability to analyze the logs and metrics being collected.
What truly captured our attention was their novel approach to a problem they’d experienced firsthand: the unsustainable surge in observability and security costs as enterprises scale their AI operations. The numbers tell a compelling story: traditional enterprises adopting AI are experiencing up to 100x increases in data volumes compared to just a few years ago. Yet remarkably, only 20% of this data carries meaningful value. This insight forms the foundation of Observo AI’s innovative approach.
What sets Observo AI apart is its AI-native architecture that fundamentally reimagines observability pipeline optimization. By combining advanced machine learning with agentic AI, their platform continuously evolves its understanding of data patterns, automatically optimizing pipelines in real-time. The results are striking: enterprises using Observo AI reduce data processing costs by over 50% while improving detection accuracy and accelerating incident resolution by more than 40%.
We believe Observo AI represents the next evolution in enterprise data intelligence, and their timing aligns perfectly with a critical market need, as enterprises grapple with the data explosion triggered by AI adoption. The architecture moves beyond static, rules-based approaches to dynamic, AI-driven optimization. Observo AI’s solution delivers immediate, measurable ROI by significantly reducing data storage costs while simultaneously improving security and operational insights.
The market validation has been exceptional. Since launch, Observo AI has attracted leading enterprises like Bill, Informatica, Alteryx, and Harbor Freight Tools, who are already processing petabytes of data daily through the platform. The rapid customer adoption reinforces our conviction that Observo AI is positioned to become a category-defining company in AI-first data infrastructure.
Observo AI is positioned to become a category-defining company in the AI-first data infrastructure landscape. We’re thrilled to partner with Gurjeet, Ricky, and the entire Observo AI team as they build the future of intelligent data pipelines.
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