groundcover, a Tel Aviv-based observability platform, has raised $100 million in Series C funding led by One Peak with participation from Morgan Stanley Expansion Capital. The company delivers full-stack cloud-native observability powered by eBPF with a Bring Your Own Cloud architecture that keeps all telemetry inside customer VPCs. The capital will accelerate development of its AI-native features and expand enterprise go-to-market efforts.
Observability Shifts to AI Infrastructure
The timing aligns with accelerating demand for observability that supports autonomous AI systems. One Peak led the round after identifying groundcover as the only platform built for the AI era. Existing backers including Zeev Ventures, Angular Ventures, Heavybit, and Jibe Ventures also participated, signaling sustained conviction from seed through growth stages.
Legacy Pricing Models Create Openings
Traditional observability vendors tie costs to data volume, leading enterprises to reduce retention or increase sampling. groundcover's per-node pricing and eBPF sensor deliver full-fidelity telemetry without instrumentation or sampling. Customers report 50-67% cost reductions while maintaining 100% signal fidelity.
eBPF and BYOC Deliver Differentiation
The platform deploys inside customer clouds and uses kernel-level eBPF to capture metrics, logs, and traces without code changes. This architecture directly addresses data sovereignty requirements that SaaS incumbents cannot meet. Agent Mode, launched earlier in 2026, adds an AI layer that investigates incidents and acts through connectors in Slack, Linear, and GitHub.
"The AI era demands a completely different observability architecture, and groundcover is the only company that has built it." — David Klein, co-founder and managing partner, One Peak
Growth Equity and Institutional Backing
One Peak's focus on scaling European and Israeli software companies to $100M+ ARR matches groundcover's trajectory. The firm recently led rounds for Datarails and Elliptic. Morgan Stanley Expansion Capital's participation brings late-stage credibility and access to Fortune 500 relationships.
Market Expands Amid Cost Pressure
The observability tools and platforms market stands at $11.91 billion in 2026 and is projected to reach $22.99 billion by 2031 at a 14.1% CAGR. Competitors such as Coralogix raised $550 million in its Series F in June 2026, while Chronosphere was acquired for $3.35 billion after raising $419 million. Datadog reported $3.43 billion in FY2025 revenue, highlighting both market size and customer frustration with consumption-based pricing.
Cyber Unit Founders Bring Domain Expertise
Co-founders Shahar Azulay and Yechezkel Rabinovich previously served together in Israel's Prime Minister's Office cyber unit. The background informs groundcover's emphasis on data residency and full-fidelity collection, capabilities that resonate with security-conscious enterprises.
The company has tripled ARR, grown to 140 employees, and secured over 250 paying customers including multiple seven-figure contracts. It now targets approximately $100 million in annual sales.