UPDATED 13:11 EDT / OCTOBER 07 2021

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Full-stack network observability startup Kentik nabs $40M funding round

Startup Kentik Inc. today announced that it has closed a $40 million Series C funding round led by Third Point Ventures to hire more engineers and speed up go-to-market initiatives.

San Francisco-based Kentik provides software that helps information technology teams monitor their networks for issues. The startup enables administrators to detect cases when connections are slow and identify the root cause. Kentik’s software can spot other types of anomalies as well, such as malicious traffic that indicates a company may have experienced a data breach.

Kentik says its software is used by IBM Corp., Zoom Video Communications Inc., Box Inc. and hundreds of other enterprises. The startup reportedly expects to add  “double-digit millions of new business” in the next year and maintains a gross margin of more than 85%.

The network observability segment in which Kentik competes is crowded. There are many observability tools in the market partially because there’s a large number of factors that can cause a corporate network to malfunction. Technical issues can be the result of hardware failures, misconfigured cloud infrastructure, an application bug or an internet provider outage. IT teams historically had to tackle the different types of network issues with different, specialized tools.

Kentik bills its software as a “full-stack” platform that enables IT teams to monitor all the components of their networks through a single “pane of glass.” Network components are visualized in graphs that make it possible to pinpoint which system is responsible for a malfunction. Kentik also provides business metrics, such as the costs of moving data between two cloud environments. 

For finding network performance issues, the startup provides a tool called Synthetics. Kentik says the tool identifies slow connections and other bottlenecks by sending simulated data traffic to applications. The simulated traffic is then measured to determine if an application is processing requests with a delay. Synthetics can test network performance as often as every second, according to Kentik, which means that speed drops can potentially be detected almost immediately after they emerge. 

Another use case that Kentik targets is cost optimization. According to the startup, the network data that its platform collects contains patterns that can help companies reduce network-related expenses. 

Data traffic often can’t be sent directly to its destination, particularly when the destination is a far-away system, but must go through intermediary networks. Using intermediary networks sometimes incurs additional costs. Kentik’s platform allows enterprises to track how their interconnect costs change over time. The platform also detects when there may be an opportunity to reduce a company’s reliance on intermediary networks by using an alternative route that sends data directly to its destination.

For cybersecurity teams, another market Kentik targets, the startup’s platform helps identify malicious traffic. It also automatically blocks distributed denial-of-service attacks. Large network operators such as internet providers, in turn, can use the platform to plan infrastructure changes. 

“This financing will help us accelerate investments in our platform as well as partner with other observability leaders to end the era of fragmented monitoring,” said Kentik co-founder and Chief Executive Officer Avi Freedman. 

As part of its growth plans, Kentik intends to hire more employees across its engineering, sales, marketing, operations and product management teams.

Kentik has introduced two new offerings since the start of 2020. The startup’s Synthetics performance monitoring tool launched last July and was followed earlier this year by Kentik Cloud, a product suite for monitoring cloud environments. Today’s funding round will enable Kentik to double down on product development, potentially by adding yet more software tools to its portfolio.

The new investment could also help the startup expand its presence in the open-source ecosystem. In August, Kentik launched an open-source initiative dubbed Kentik Labs through which it has already released several internal software tools.

Kentik is backed by a total of $102 million in funding.

Image: Kentik

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