Datadog, a leading cloud monitoring and security platform, has announced its acquisition of Metaplane, an AI-powered data observability startup, for an undisclosed amount. This move accelerates Datadog's expansion into the data observability market, building on the launch of related products.

Metaplane, founded in 2020 by MIT graduate Kevin Hu, former HubSpot engineer Peter Casinelli, and ex-Appcues developer Guru Mahendran, initially launched as a "customer success" product that analyzed firms' data to prevent churn. After going through Y Combinator and pivoting due to the pandemic, Metaplane shifted its focus to building data analytics-focused tools. The startup had raised $22.2 million from investors, including Khosla Ventures, Y Combinator, and Flybridge Capital Partners, before its exit.

Metaplane's technology monitors data using anomaly detection AI models trained primarily on historical metadata. It establishes lineage from data in a data warehouse and notifies stakeholders of issues via their tool of choice, such as Slack or PagerDuty. The system learns over time as users mark alerts as expected changes. Datadog plans to continue supporting existing and new customers through a rebranded "Metaplane by Datadog" offering.

The acquisition is a strategic move for Datadog, which recently reported earnings that topped estimates but provided full-year 2025 revenue guidance that came in below expectations. Expanding its data observability portfolio can help the company tap into a large and growing market. According to Grand View Research, the market for data observability tools was worth $2.14 billion in 2023 and is expected to grow at a 12.2% compound annual growth rate between 2024 and 2030.

Datadog's VP, Michael Whetten, emphasized the importance of observability in managing complex and business-critical workflows, particularly as more businesses deploy AI applications. "By unifying observability across applications and data, Datadog will help organizations build reliable AI systems," Whetten said in a statement.

The acquisition is Datadog's second this year, following its purchase of Quickwit, an open-source, cloud-native search engine for logs, in January. Datadog faces stiff competition in the data observability market from players like Monte Carlo, Cribl, Manta, Observe, Better Stack, Coralogix, and Unravel Data. To succeed, the company will need to differentiate its data observability products through acquisitions like Metaplane and in-house projects such as jobs and streams monitoring.

Metaplane's co-founder, Kevin Hu, expressed his enthusiasm for joining forces with Datadog, stating, "Our mission at Metaplane is to help companies ensure trust in the data that powers their business. Joining forces with Datadog enables us to bring data observability to tens of thousands more companies, while bringing data teams and software teams closer together."

The acquisition is expected to have a significant impact on the data observability market, as Datadog continues to expand its capabilities and offerings. With its growing portfolio of data observability products, Datadog is well-positioned to capitalize on the growing demand for these solutions.