Observability platform Honeycomb pockets $50M in new funding

APPS

Observability platform maker Hound Technology Inc., which does business as Honeycomb, today announced that it has raised $50 million in a Series D venture round, bringing its total funding to $150 million.

The seven-year-old firm, which takes credit for popularizing the term “observability” as an evolution of application performance management, has staked its reputation on its ability to visualize complex serverless and microservices-based environments. The firm said it doubled revenue and employee headcount in 2022 and achieved 160% net revenue retention — a measure of earned revenue from existing customers — across more than 600 customers.

The company says it comes at observability from a fundamentally different perspective because it doesn’t treat logging, monitoring and application performance management as three different categories. Leading competitors “made architectural decisions a decade ago and are locked into certain ways of dealing with data that we aren’t,” said co-founder and Chief Executive Christine Yen. “There’s been an explosion of complexity and these tools were not built for 500 microservices across thousands of software containers.”

Simplified telemetry

The ability to analyze high-cardinality data is important for discovering new types of problems in complex services-oriented environments, the company says. Honeycomb enables patterns to be quickly detected across billions of data points representing how users are interacting with an application. Data is never aggregated or discarded.

“This world is so caught up in what types of data you use,” Yen said. “We ask why you really need to store the sum total of your shopping cart separately from the items in the cart. If you’re trying to track many, many different slices of your data you’re going to sharply increase the number of things a vendor has to track. Our data store makes it not prohibitively expensive to do so.”

The software is data type-agnostic and uses only one type of telemetry – traces — as the basis for observation. “Instead of trying to do pre-optimization and separating out logs and traces we accept that traces are the purest form of [telemetry] data,” Yen said. “They are just logs tied together into a hierarchy.” The software allows multiple data types to be stored side-by-side for greater flexibility and simplicity, she said.

The $50 million round is “what we saw we needed to hit the next level of growth as well as make investments in geographic expansion and product development,” Yen said. “It wasn’t a difficult raise. We kept a number of relationships warm” from previous funding rounds.

Funding was lead by e.ventures US Master Manager LLC, which does business as Headline, with participation from existing investors, Insight Partners Inc. and Scale Venture Partners.

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