YC alum Odigos aims to help enterprises find errors and stamp out latency in their systems

Companies’ data architecture today looks nothing like it did 20 years ago, but monitoring and tracing tools haven’t followed suit, making it difficult for engineering teams to identify the root cause of errors and latency issues. 

Israeli developer Eden Federman thinks the solution is distributed tracing, a more advanced observability method, but he found adoption to be lower than he expected due to implementation hurdles. This led him to co-found Odigos, a startup that helps companies easily monitor complex, cloud-native systems that handle large amounts of data, as is now often the case.

He and CEO Ari Recht aren’t related, but their wives are cousins. That’s how Federman ended up asking Recht, an investment banker (standing on the left in the picture above), if he could present him with an idea. This soon turned into a series of meetings. “And the more I worked with him, the more I liked him, and the more I understood that he was missing the business side of it,” Recht told TechCrunch.

Unlike Federman, Recht doesn’t code, but he has spent lots of time with and at startups, and is clearly at ease with being the business face of tech-heavy Odigos. Together, they made for a convincing enough team that Y Combinator selected them to join its Winter 2023 batch, which primarily took place in person in San Francisco. 

“We actually lived together for six months there and it was a very successful time for us,” Recht said. One highlight was meeting the angel investors who eventually backed Odigos. Initially named Keyval, the company raised funding through a SAFE note around the time of YC’s Demo Day, and more recently, a $13 million round led by Boston-based VC firm Venture Guide.

One the angel investors in the round, Lightstep co-founder Ben Sigelman, is also the co-creator of OpenTelemetry, the open-source observability framework that Odigos is leveraging and helping maintain. Recht described it as “awesome,” but also “very difficult” to implement and configure. Hence the opportunity for Odigos to provide “enterprise-grade OpenTelemetry” to its clients. 

Odigos’ target market is large companies that are neither the Googles of the world nor small startups. Giants can usually figure out distributed tracing on their own, including with Odigos’ open source repositories. But less tech-savvy enterprise clients need support to implement what would otherwise require extensive manual work.

That’s where eBPF comes in. A legacy term that stands for Extended Berkeley Packet Filter, the technology lets developers write programs that run directly in the Linux operating system. Different startups use it in various ways, but for Odigos, it was the key to unlocking automated distributed tracing without overly impacting performance or requiring code changes. 

That’s particularly valuable for enterprise companies, Recht said. “If you have 25,000 applications, or 25,000 microservices, it’s almost impossible for you to do that manually; and if you do, there’s going to be a lot of performance overhead that you’re going to incur.”

Federman and most of Odigos’ team members are active open source contributors, especially in the eBPF and OpenTelemetry groups, and the startup donated its initial project to the Cloud Native Computing Foundation. That’s also how they know what might be missing for enterprise clients. “I think one of the things that help customers trust us is our open source background,” Federman said.

As is often the case with startups that have an open source side, Odigos’ commercial offering isn’t exactly the same. According to Federman, the open source version of Odigos works very well on single Kubernetes clusters, but its enterprise edition supports multiple environments.

More important, Odigos gives large organizations is a chance to implement distributed tracing without having to tap into developer resources or become specialists. And Odigos doesn’t require them to change their application performance monitoring tools, whether that’s Datadog, Dynatrace, SigNoz, or Honeycomb, whose CEO Christine Yen invested in Odigos’ latest round.

Other participants in the most recent round include Firestreak Ventures, Mango Capital, Salesforce Ventures, and various angel investors. The new funding will help the startup develop its solution, invest in its go-to-market strategy, and establish new headquarters in Boston, where its lead investor is located, and where the founders eventually expect to move. This will also bring it closer to its prospects; while still in stealth mode, the company recently signed “a major POC” with a very large American company.