The Future of Observability is Bright as Honeycomb Announces $50M in Series D FundingBy Christine Yen | Last modified on April 6, 2023
TL;DR—This is a fundraising post! Yes, even in this economy.
Here at Honeycomb, we've always focused more on the problems we help our customers solve rather than playing the meta game of posturing in startup-land—so these fundraising blog posts are usually the least fun to write (and read, probably). But this one is a little different.
The future of observability has never been more exciting, and this latest round ensures we can continue to invest—with conviction—in improving the lives of software engineering teams. We hope this is a moment of welcome change from the soul-crushing headlines plaguing the tech industry these past few months.
Strength in numbers
Honeycomb came into 2023 on a high note: we racked up another consecutive year of 2x revenue growth while driving over 160% net revenue retention across 600+ customers globally.
We're especially thrilled to add companies like Robinhood, Moov, Frasers Group, and Equinix to our growing list of customers like Vanguard, Slack, and Vercel. Our customers are doing great things with observability, like finding issues before their users do, executing challenging migrations more seamlessly, and making deploys boring—the markers of high-performance engineering.
But while my cofounder Charity Majors and I started this company to build a great product and build a great software business (in turn enabling our customers to do so as well), we've always shared a third, underlying motivation: to build a company our people are proud to be a part of.
Because of this, it’s especially rewarding for Honeycomb to be recognized recently for the work we do within our metaphorical walls, with Comparably naming us in over ten different categories, including "Best Company Outlook," "Best Company for Diversity," "Best Leadership Teams," and "Best Company Culture." 96% of our employees also ranked Honeycomb as a great place to work.
While it’s a bit against our grain to be triumphalist, these recognitions put labels on something we know we’re doing right—and I know that it’s this success internally that has positioned us to achieve major milestones like the growth behind this latest round of funding.
2022 was the year observability went mainstream
All of these accomplishments took place in the midst of incredible momentum on a broader industry level; 2022 truly was the year of observability.
From increased awareness and validation of observability, like Gartner naming us a Leader in their Magic Quadrant for APM and Observability (as well as adding “Observability” to the title of its report!) to the release of our O'Reilly book, Observability Engineering, interest in the concept and practice of observability—as well as Honeycomb's role in popularizing it—has taken off like wildfire.
This truly hit home last year at AWS re:Invent when our team looked around and saw a sea of “observability”-oriented solutions (a problem to discuss another time). Engineering teams are recognizing observability as a distinct and emerging practice, and are hungry for a truly differentiated product like Honeycomb.
The open source community even got in on the action, with OpenTelemetry becoming the second most active project in the CNCF (validating the popularity of a new standard for observability), and Honeycomb remaining a significant contributor to the project.
Here’s why $50M in Series D funding is a huge deal
Observability hasn't always been a sure thing—and we're so grateful for the investors who made those early bets to support us along the way. There were so many times we were told to give up because more established APM tools dominated the market—we were told this was a “solved problem.” But we knew that our vision made the market ripe for disruption, and so far this has proved to be true.
We're delighted to announce that this round is being led by Headline, a Honeycomb backer since 2018, with participation from existing investors Scale Venture Partners, Insight Partners, NextWorld Capital, Storm Ventures, and Industry Ventures.
We'd also like to formally extend a warm welcome to angel investors Guillermo Rauch, CEO of Vercel and Dominik Richter, CEO of HelloFresh—both longtime Honeycomb customers—alongside Matias Woloski of Auth0, Sanjay Poonen of Cohesity, and Meghan Gill of MongoDB, among others.
Last but not least, we'd like to announce the appointment of our new independent board member, Kelly Watkins. Kelly brings extensive experience as a marketer, operator, and leader, from her time as CEO of Abstract and marketing executive roles at Slack, Bugsnag, and GitHub. She has a real nose for talent and an incredible ability to cut through bullshit.
Honeycomb has a well-deserved reputation for punching far above our weight when it comes to recruiting and retaining top-notch talent. It’s less well-known that the caliber of our supporting team—these investors, board members, and advisors—is just as strong… and we wouldn’t be here today without them, either.
What’s next for Honeycomb
I talked early on about investments we want to make—so let’s dive deeper into that.
As we look ahead, there are a few exciting areas we're exploring, each of which represent a new, recently-opened realm of possibility:
- Automatic instrumentation. OpenTelemetry's support for auto-instrumentation is a great starting point; we also know that adding rich, custom instrumentation is how teams get the most value out of their observability tools. However, we’re looking at recent technology trends that can push auto-instrumentation even further, to capture even more useful instrumentation about what your code is doing when you're not watching.
- Observability for all—for real. Honeycomb is building for software engineering teams—which means we leverage the expertise of those who know your systems deeply, and unlock collaboration across specialties. We can do this by finding ways to make our powerful query experience more intuitive, accessible, and human for a broader population, whether you're a seasoned platform engineer or a new frontend hire.
- Better solutions for modern architectures. As the explosion of new deployment patterns begins to settle into more well-established lines, there's an opportunity for Honeycomb to offer easier workflows for teams to get started faster without losing the flexibility and customization that makes our platform so powerful.
Equally as exciting, the new funding gives us the opportunity to invest in the ecosystem around us. The best developer tools fit into, or amplify, an existing workflow—and while we're proud to have built strong relationships with some of the best-in-class tools used by engineering teams today, we're excited to turn conceptual or philosophical alignment into real, powerful product integrations.
With all of this said, and as excited as we are to continue marching forward, what has always been unique about Honeycomb will remain just so.
- The three pillars are nonsense. Logs, metrics, and traces are just different visualizations of a thing that happened, and correlating across them is only a problem if you insist on the inefficiency of slicing reality up to begin with. Start with a data format that lets you capture rich custom fields that matter to you (traces work great for this), then visualize whatever you want, seamlessly.
- We're here to build mecha suits, not robots. No matter how good Honeycomb's software (or AI in general) gets, your humans will always have context in their heads that isn't reflected in your data. We build technology to augment what your humans bring to an investigation, not replace them.
- We build sociotechnical systems. Enabling your team to work better together, through observability, is our ultimate goal. We'll never lose sight of what it means to build a tool that, in turn, streamlines processes and enriches engineering cultures.
Finally, a giant and warm thank you
We wouldn't be here if it wasn't for the support of our customers and the community of observability enthusiasts all around us. Your feedback, success stories, and belief in what's possible are Honeycomb's fuel. Thank you.
To the Honeycomb team—this crew of contrarians, brilliant dreamers, and big-hearted rebels—you all make Honeycomb better, every single day. Thank you from the bottom of my and Charity’s hearts.
I can't wait to build the future of software engineering with all of you. Onwards!
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