Groundcover secures $100 million to develop observability solutions for the AI era.

      Groundcover, an observability startup that maintains its customers’ monitoring data within their own cloud, has secured $100 million in a Series C funding round.

      The financing was spearheaded by growth investor One Peak, with participation from Morgan Stanley Expansion Capital and existing investors Zeev Ventures, Angular Ventures, Heavybit, and Jibe.

      This funding round brings the company’s total financing to $160 million. It follows a year in which Groundcover claims to have tripled its annual recurring revenue and doubled its workforce, a growth trajectory that often leads to larger investments.

      Groundcover provides observability solutions, which software engineers utilize to monitor production systems. Its approach is architectural: instead of sending telemetry data to an external vendor's cloud, it operates within the customer’s own environment through a “bring your own cloud” model, ensuring data privacy and, according to the company, reducing costs.

      The technical advantage lies in eBPF. The company's sensor employs this Linux kernel technology to capture comprehensive telemetry across infrastructure, applications, and AI workloads without requiring code alterations or sampling, while also supporting OpenTelemetry, the open instrumentation standard.

      This combination has positioned the company favorably against established competitors like Datadog since its earlier funding rounds.

      Groundcover argues that observability is struggling under AI demands, with telemetry volumes increasing rapidly as teams embrace cloud-native tools that require enhanced visibility into AI models and workflows. They claim that legacy systems respond by forcing customers to reduce or limit their data collection.

      The company’s response is its Agent Mode product. CEO Shahar Azulay describes it as an agentic layer that assists engineers in identifying, diagnosing, and resolving issues in production and positions this funding as a strategic move to enable engineers and AI agents to work collaboratively with the same data.

      “We are the only platform that leverages the capabilities of eBPF alongside the limitless potential of BYOC for observability,” Azulay stated.

      He noted that the firm intends to “transform how engineers and agents collaborate to introduce genuine autonomy into production operations,” emphasizing a theme of autonomous operations that the funding aims to support.

      One Peak, a London-based growth firm investing in European and Israeli software companies, led the funding round. David Klein, its co-founder and managing partner, articulated the firm’s belief that “the AI era requires an entirely different observability architecture, and Groundcover is the only company that has constructed it.”

      The metrics presented to substantiate this claim come from Groundcover itself. The company reports over 250 paying customers, including early-stage startups and a Fortune 5 enterprise, along with more than a threefold increase in year-on-year ARR, and several seven-figure contracts secured in the last twelve months, although these figures have not been independently verified.

      The capital raised is primarily intended for North America. Groundcover indicates that most of it will be directed towards its go-to-market strategy, where it asserts that it is increasingly replacing legacy competitors. The remainder will fund expansion into new regions, enhance partnerships with cloud providers, and develop more AI functionalities.

      Founded in 2021 and headquartered in Tel Aviv, Groundcover continues to pitch a narrative that emphasizes the shortcomings of incumbents, suggesting that their observability solutions are designed to minimize data, while in the AI era, the ability to retain all data will be rewarded. The Series C funding signifies market validation for this approach, with investors agreeing that the investment is justified with an additional $100 million.