Datadog Acquires Metaplane: Expanding AI-Powered Observability

Datadog Acquires AI-Powered Data Observability Startup Metaplane

Datadog, a leading cloud monitoring and security platform, announced on Wednesday the acquisition of Metaplane, a startup specializing in AI-driven data observability.

The financial details of this transaction have not been publicly revealed.

Expanding Data Observability Capabilities

According to a company press release, this acquisition is intended to significantly accelerate Datadog’s expansion within the data observability sector. This builds upon the recent introduction of related products by Datadog.

Metaplane will continue to serve both its current and future customer base under the new name “Metaplane by Datadog.”

“Observability is evolving beyond its traditional role for developers and IT professionals,” stated Michael Whetten, VP at Datadog. “It’s becoming a crucial component of daily workflows for data teams managing increasingly intricate, business-critical processes.”

He further emphasized that the increasing adoption of AI applications will amplify this complexity. Datadog aims to provide unified observability across both applications and data, enabling organizations to construct dependable AI systems.

Metaplane's Origins and Development

Founded in 2020 by Kevin Hu, a graduate of MIT, Peter Casinelli, formerly of HubSpot, and Guru Mahendran, an ex-Appcues developer, Metaplane initially focused on customer success.

The company’s original product analyzed client data to predict and prevent customer churn. Following participation in the Y Combinator program and the onset of the pandemic, Metaplane strategically shifted its focus towards developing data analytics tools.

How Metaplane's Technology Works

Metaplane utilizes anomaly detection AI models to monitor data. These models are primarily trained on historical metadata.

The platform works to map data lineages within data warehouses – the systems used for reporting and analysis – and proactively alerts stakeholders to potential issues through their preferred communication channels, such as Slack or PagerDuty.

Users can then categorize alerts as expected changes or otherwise, allowing Metaplane’s system to continuously learn and improve its accuracy.

Funding and Team Size

Prior to the acquisition, Metaplane had secured a total of $22.2 million in funding from investors including Khosla Ventures, Y Combinator, Flybridge Capital Partners, Guillermo Rauch (Vercel CEO), and Dharmesh Shah (HubSpot CTO).

As of January 2023, the Boston-based startup comprised a team of approximately 10 employees.

Statements from Leadership

“Our core mission at Metaplane is to empower companies with confidence in the data that drives their operations,” said Hu. “Integrating with Datadog will allow us to extend data observability to a significantly larger number of organizations, fostering closer collaboration between data and software teams.”

Datadog's Acquisition Strategy

This marks Datadog’s second acquisition of the year. In January, the company completed the acquisition of Quickwit, an open-source, cloud-native search engine designed for logs.

Expanding into data observability is a logical step for Datadog, given the market’s substantial size and growth potential. This expansion could become a key revenue driver for the company in the future.

While Datadog recently reported stronger-than-anticipated net profits, its revenue forecast for full-year 2025 fell short of analyst expectations.

Market Growth and Competition

According to a report by Grand View Research, the data observability tools market was valued at $2.14 billion in 2023. It is projected to experience a compound annual growth rate of 12.2% between 2024 and 2030.

The market is competitive, with major players including Monte Carlo, Cribl, Manta, Observe, Better Stack, Coralogix, and Unravel Data.

The Path Forward for Datadog

Datadog’s primary challenge will be to effectively differentiate its data observability offerings. The company is pursuing this goal through both strategic acquisitions and internal development initiatives, such as data jobs and data streams monitoring.