The Numbers Behind Snowflake’s $1 Billion App-Monitoring Acquisition

On Thursday Snowflake said it was buying app monitoring startup Observe, confirming our earlier scoop. The sale, which we had previously reported would be roughly $1 billion, provides a decent exit for early investors in the nine-year-old startup, such as Sutter Hill Ventures and Madrona Ventures, both of which also previously backed Snowflake when it was privately held. 

It also saves Observe from having to raise more money this year.

Observe was on track to generate $70 million in annualized revenue by the end of its fiscal year ending this month, up from $30 million in annualized revenue a year earlier, according to three people who reviewed its financial statements. Annualized revenue typically refers to the prior month’s revenue multiplied by 12.