Is data observability recession proof? – Marketingwithanoy

After his $135 million Series D last week, Monte Carlo became the latest unicorn in a burgeoning data observability category, which the startup defines as “an end-to-end approach to empowering teams to deliver more reliable and reliable data.”

If you’re wondering how serious data quality issues are, Monte Carlo CEO Barr Moses has an answer: “Data quality issues have plagued even the most data-driven companies. Just a few weeks ago, Unity, the popular gaming software company, cited “bad data” for a $110 million impact on their ad business.

The Moses startup isn’t alone in pursuing the data observation market opportunity. The same day Monte Carlo announced its newly minted valuation of $1.6 million, competitor Cribl confirmed its unicorn status with another round of funding.

“While smaller than Cribl’s Series C, which crossed nearly $200 million, the Series D values ​​the company at $2.5 billion in retrospect, according to a source, which is over $1.5 billion in August 2021,” noted Marketingwithanoy’s Kyle Wiggers. on.

Any three-digit deal would be individually noteworthy. Two of them in the same room, even more. But what really caught our attention is that the Monte Carlo and Cribl deals were announced now, in the midst of a broad downturn of startups.

We know that Grand Tours can take some time to be both closed and announced, meaning the Series D rounds of Monte Carlo and Cribl could reflect the state of the market a few weeks ago. But there’s a more recent data point to keep in mind: hiring, which is still happening.

On one side of the table, companies are still filling the kinds of vacancies that create demand for data quality solutions. “Despite the volatility, jobs for data engineers and analytics are increasing and companies continue to hire for these roles in record numbers,” Moses told Marketingwithanoy. On the other hand, data observation startups themselves hire people. Not just unicorns like Cribl and Monte Carlo, but competitors like seed-funded startup Sifflet.

Can data observability be recession proof? To find out, we spoke to Moses, as well as Sifflet CEO Salma Bakouk† To complete their first-hand knowledge, we gathered notes from two investors familiar with the space: FirstMark Partner Matt Turk and general partner of the Data Community Fund Pete Soderling.

The picture that emerged from our conversations is that tailwinds for the data observation category as a whole may not translate into wins for every startup in the space. Why? Let’s investigate.

Rising with the date

When we talk about tailwind for data observability, it’s because demand is driven by a broader trend. TL;DR: More and more companies are becoming data-driven and therefore face the kind of data quality issues that data observation startups face.

Estimating a growing opportunity is never easy, but in our conversations we heard that data observations could soon become a universal problem for large companies.

“I firmly believe that any business, both technical and non-technical, should become not just a software company, but also a data company,” Turck said. “That’s why people are excited about the opportunity — it’s a very large market and a huge trend.”

The fact that the addressable market for data observation is large is one thing. But it would be pointless if target companies themselves did not see reliable data as a necessity. According to Moses, this is the case in more and more sectors.

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