The secret weapon to higher-quality software — Creandum ♡ Better Stack.
Venture firms look for startups everywhere and anywhere. Oftentimes our trusted network serves as a strong qualifier, and hence warm introductions are most efficient. But many times it can be very random how we find startups we get excited about. This time, Creandum investment manager Lauri, who’s a developer at heart, was targeted by an ad for a new type of observability service. Intrigued by their marketing, he started playing around with the tool and quickly got blown away by how incredibly user-friendly its onboarding and product experience was. Switching back to his VC mindset, he proactively knocked on the founders’ door and asked about the company’s plans ahead. And that is how we met Creandum’s latest portfolio company Better Stack.
Observability what?
Within the world of software, development observability is the practice of monitoring and measuring the current state of your system. Basically, observability is core to any software product that cares about customer experience or even just their top line, as it really tells you in real-time (or often 15 minutes too late with legacy products) if your stuff is working or not, and whether your business is operational or not.
Most well-known observability players are companies like Datadog, New Relic, Splunk, and AppDynamics. These impressive giants generate incredibly high-quality revenues, due to strong lock-in effects and account expansion potential. Public markets historically have valued these types of companies some of the highest in the world, when looking at enterprise value / next twelve-month revenue. At the time of writing Datadog is the second-highest valued company in the world in terms of EV/NTM revenue (at ≈19x only after Snowflake at 21x). These are the type of companies VCs dream to back, so when we see a seismic market shift that can generate the next observability winner we pay attention. 👀
Why now and why Better Stack?
Most existing observability solutions were built using technologies from 10–15 years ago (such as Elastic’s ELK) and are still very capable at solving the work they were designed for. However, as with all software categories, when the world evolves and software engineering practices mature, many legacy tools become slow in performance, feature bloated, and cumbersome to use. And with continued demands on performance, increasing breadth and depth of tech stacks, these legacy solutions also become increasingly expensive solutions.
Better Stack comes to save the day by simply offering a faster and cheaper observability stack. The only way to win against the powerful market leaders mentioned above is through 10x lower cost and 10x better performance. Better Stack does this by recreating the observability stack on top of ClickHouse (a revolutionizing open-source database management system) and other state-of-the-art technologies. The technical implications of this are many, and as an example with Better Stack companies may be able to move all their data from what’s called “cold” to “hot storage”, giving them completely new ways to monitor, analyze and manage their infrastructure and look at things in a much bigger picture than just the latest snapshot of an error.
Furthermore, Better Stack is delivering their products in a seamless developer experience (DX) — something which has been completely lacking in this category until now. The user love we see for Better Stack is second to none in the observability space. At Creandum, we pride ourselves as VCs who deeply care about product experiences, and Better Stack not only redefined what beautiful and intuitive observability products look like but ultimately Better Stack customers will be empowered to build better products themselves. Instead of having to spend time on obtaining a PhD in setting up their observability stack –which is more of a necessary evil rather than core to their product offerings.
Past winners in developer tools were built on feature breadth, but we believe that the future will be built on superior DX, collaboration, and equipping developers with joyful experiences and best practice, rather than tool boxes filled with all the tools in the world. Think Netlify, Vercel, Supabase, and many others — all replacing individual services within the product catalogs of cloud service providers with dramatically better packaging and developer experience, unlocking both superior productivity and peace of mind in software delivery.
Currently, Better Stack is offering 2 products: Better Uptime (a monitoring and incident reporting service) and Logtail (a log management solution), and the world can look forward to other complementary products in the future.
The dynamic duo.
These products come from a very special founding team: Juraj is an exceptional individual combining a deep technical background paired with a commercial mind thinking about distribution and growth hacking — a rare combination. Juraj is complemented by Veronika who shares an equal technical depth as well as brings the operational muscles to the team. In a nutshell — a great complementary founding duo. 💪
Today, we’re honored to welcome Better Stack to the #CreandumFamily and announce that the fund is leading the company’s $17M Series A. We can’t wait to see Juraj and Veronika scale this far and beyond and redefine what we know as observability. 🚀
P.S.: The team is hiring!
