Groundcover

Cloud Observability · AI Infrastructure · Developer Tools

Funding

Groundcover raises $100M Series C at $500M valuation to challenge Datadog

Its pitch is architectural: telemetry stays inside the customer's own cloud instead of a vendor's, undercutting rivals on both privacy and cost.

• Groundcover raised a $100 million Series C led by One Peak, with Morgan Stanley Expansion Capital joining alongside existing backers, valuing the company at about $500 million.
• Founded in 2021 by CEO Shahar Azulay and CTO Yechezkel Rabinovich, Groundcover sells cloud observability software that lets engineers watch what their systems are doing in production.
• Its sensor uses eBPF, a Linux kernel technology, to capture full-fidelity telemetry across infrastructure, apps and AI workloads without code changes or sampling, then pairs it with OpenTelemetry support.
• Under its bring-your-own-cloud model, telemetry data is stored and processed inside the customer's own cloud environment rather than shipped to Groundcover's servers, and pricing is based on monitored hosts rather than data volume.
• The round brings total funding to $160 million; over the past year Groundcover says it tripled annual recurring revenue, doubled headcount and passed 250 paying customers.
• Traditional observability vendors like Datadog often charge by data ingested, pushing customers to sample or throttle telemetry — a gap that grows more costly as AI agents demand complete, unsampled production data to act on.
• As AI agents increasingly operate software autonomously, the quality of the telemetry feeding them becomes a reliability bottleneck, turning observability from a debugging afterthought into core AI infrastructure.