Datadog Expands Capabilities with Eppo Acquisition: A Game-Changer in Feature Flagging and Experimentation
Datadog is actively expanding its portfolio through strategic acquisitions, enhancing its capabilities in the cloud monitoring and security sector. Recently, the company announced its acquisition of Eppo, a leading feature flagging and experimentation platform, just weeks after acquiring Metaplane, an AI-powered observability startup.
Datadog Acquires Eppo: Enhancing Product Analytics
Eppo will operate under the new brand name “Eppo by Datadog,” continuing to support its existing clients while attracting new customers. Although the financial details of the deal remain undisclosed, reports from Upstarts Media suggest that Datadog may have invested around $220 million in this acquisition.
The Importance of Experimentation Platforms
The demand for tools enabling developers to experiment with different app versions is growing. However, building the necessary infrastructure for product analytics can be complex. This includes:
- Data pipelines
- Statistical methods
- Analytics workflows sourced from cloud environments
As Eppo co-founder and CEO Che Sharma mentioned in a previous interview, the platform was developed based on his experiences with experimentation software at Airbnb and Webflow. Eppo provides confidence intervals to help users interpret the results of randomized app experiments.
Standing Out in a Competitive Market
Despite the influx of startups like Split, Statsig, and Optimizely in the experimentation space, Eppo has distinguished itself. The San Francisco-based company successfully raised $47.5 million from renowned VC firms such as Innovation Endeavors, Menlo Ventures, and Amplify Partners prior to its exit, as reported by Crunchbase.
Company Growth and Clientele
As of June 2022, Eppo had around 15 employees and was valued at $80 million. Its customer base included prominent names like Goldbelly, Netlify, and Kumu, showcasing its relevance in the industry.
Vision for the Future: Experiment-First Culture
Sharma emphasized Eppo’s commitment to fostering a high-velocity, experiment-first culture across various companies, stating, “With Datadog, we are uniting product analytics, feature management, AI, and experimentation capabilities to help businesses reduce risk, learn quickly, and deliver high-quality products.”
Datadog’s Strategic Goals Post-Acquisition
Following a recent report of better-than-expected net profits but a revenue forecast below analysts’ expectations, this acquisition is poised to enhance Datadog’s product analytics offerings. The global market for product analytics was valued at $9.09 billion last year and is projected to grow to $27.01 billion by 2032, according to Fortune Business Insights.
Michael Whetten, VP of Product at Datadog, highlighted the challenges posed by deploying multiple AI models in production. He stated, “Experimentation addresses these correlation and measurement challenges, allowing teams to compare various models, assess user engagement against cost trade-offs, and ultimately create AI products that deliver tangible value.”
For more insights into the evolving landscape of product analytics, check out our related articles on Product Analytics Trends and AI in Business Applications.
