Israeli Cyber Unit Veterans' Startup Groundcover Raises $100 Million at $500 Million Valuation

Groundcover, a cybersecurity startup founded in 2021 by Shahar Azulai and Yehezkel Rabinovitch, both former members of the Israeli Prime Minister's cyber unit, has completed a $100 million Series C funding round led by One Peak. Other participants included Morgan Stanley Expansion Capital and existing investors Zeev Ventures, Angular Ventures, Heavybit, and Jibe. The funding values the company at approximately $500 million.

Groundcover develops an Observability platform designed to monitor software systems and cloud infrastructures, focusing on managing the increasing data volumes driven by AI and Agentic Workflows. The platform collects and monitors data across all infrastructure and application layers without requiring code changes or complex instrumentation. It uses a Bring Your Own Cloud (BYOC) architecture, storing data within the customer's private cloud environment to ensure data privacy and handle large AI-related data volumes. This approach also offers a pricing model not based on data volume.

The company has experienced rapid growth over the past year, tripling its revenue and doubling its workforce to 140 employees, with 80 based in Israel and the rest in Boston and San Francisco. Groundcover currently serves over 250 paying customers, including Fortune 500 companies, and generates tens of millions of dollars in annual revenue. It aims to reach approximately $100 million in sales in the coming years.

CEO Shahar Azulai highlighted the evolving monitoring market due to rising data volumes and AI usage, noting that existing solutions are costly and often insufficient. He emphasized that nearly all their clients use telemetry and monitoring early in development. Azulai stated that Groundcover aims to compete with major players like Datadog by offering a different model where data is managed within the client's cloud, delivering greater value at lower cost.