Snowflake in Talk to Acquire Observe

According to several sources and Silicon Valley contacts, Snowflake would be in advanced talks to acquire Observe.

Founded in 2017, Observe had its 1st round in 2020 as Crunchbase lists. Some founders came from Snowflake like Philipp Unterbrunner who ended his CTO tenure last May and left the company. Same as Jon Watte, co-founder, who left as well the company in April 2024. Only 2 founders remain in the company Jacob Leverich and Jonathan Trevor.

Globally 7 rounds have been done for a total of $463 million and we notice that Series B and C were approximately of the same amount – $150 million – as Series A even if this one has been split in 3 steps. Among investors we see Frank Slootman, former CEO of Snowflake and still chairman of the board, after Bob Muglia, and even Snowflake itself is an investor. We see also that Jeremy Burton, CEO of Observe sits at the board of Snowflake. Sutter Hill Ventures is also a key investor in both companies and we anticipate some desire by Mike Speiser to effectively make this move. obviously, Speiser sits at both boards. This probably explains why the exit amount is “just” $1 billion, just a bit more than a 2x multiple. For a hot topic the multiple is low.

Observe is also a special user of Snowflake cloud data warehouse database to deliver its SaaS observability service around logo analytics, metrics, monitoring, traces and events, globally telemetry and more recently APM. Its mission remains the same – a single data lake approach, analyze with a single query language and access it via a single consistent user interface. Today the company of course added AI in its message and solution…but also AI is putting pressure on the company as well offering an opportunity of exit and a “bargain” for Snowflake.

We’ll see what would be the next steps… as the competition is hot in the domain with Splunk and AppDynamics, both from Cisco, Datadog, Dynatrace, Elastic, New Relic or Prometheus/Grafana among others…