Tsuga raises USD $35 million to expand AI observability

Tsuga has raised USD $35 million in a Series A funding round led by Singular, with backing from General Catalyst, DST Global Partners and QuantumLight.

The Paris-founded observability software company said the round also included Picus and Databricks Ventures. It will use the funds to expand its go-to-market operation and roll out more of its platform for AI agents.

Tsuga sells observability tools deployed inside a customer's own cloud environment, rather than sending telemetry data to an external vendor cloud. The approach is designed to address rising data volumes, costs and governance concerns as companies run more AI systems and autonomous software processes.

According to the company, its platform can be deployed across Microsoft Azure, AWS, Google Cloud and regional sovereign clouds. Telemetry remains within the customer environment, while users can view application and infrastructure traces alongside AI agent traces, prompt and token data, confidence metrics and agent call graphs.

Tsuga also offers automated root-cause analysis on unsampled data, as well as an MCP server and command-line interface for engineering teams building their own internal agents. It describes its model as a mix of software and service, with forward-deployed engineers working with customers to tune observability settings and reduce the volume of data being processed and retained.

Tsuga argued that established observability systems are under strain because they were built for lower data volumes and rely on charging customers as telemetry grows. AI workloads now generate far more observability data through agent loops, autonomous deployments and token interactions, making older pricing and architecture models harder to sustain, it said.

Gabriel-James Safar, Co-founder and Chief Executive Officer of Tsuga, set out the company's view of that shift.

"The incumbents built good businesses on a model that no longer works. Sending your telemetry to a vendor's cloud made sense when data volumes were manageable and AI was not writing and deploying your code. Neither of those things is true any more. Every customer we speak to is paying more for observability than they were two years ago and getting less reliable coverage. We built Tsuga to end that," said Gabriel-James Safar, Co-founder and Chief Executive Officer of Tsuga.

Investor backing

Singular, an existing backer, led the round. General Catalyst joined alongside new investors DST Global Partners and QuantumLight, extending a shareholder base that also includes Picus and Databricks Ventures.

Henri Tilloy of Singular said the company's architecture removes the trade-offs that have shaped much of the sector.

"By staying out of the data path entirely, Tsuga removes every structural disadvantage the rest of the market is built on. The infrastructure tax disappears. The sampling compromise disappears. The AI governance gap disappears. What is left is a better platform at a lower cost, inside the customer's own environment," said Henri Tilloy.

General Catalyst also pointed to the company's technical design and the demands being placed on observability platforms by AI-native software.

"Tsuga has the architectural scalability, flexibility and distributed platform support that the coming generation of AI-native applications and agents require in their observability platform. This is a step-function change only possible because of their innovation across the full stack, from the storage layer to the business model," said Alexandre Momeni.

Early traction

Tsuga said it has reached several million dollars in revenue within six months of emerging from stealth. It added that average contract values are in six figures.

Named customers include Black Forest, Le Monde, Camunda and Buk. The mix suggests Tsuga is targeting both AI model developers and larger enterprise users that need to monitor conventional software systems and newer AI workflows in the same environment.

The funding comes as observability vendors face pressure to adapt products and pricing to the heavier data demands created by AI applications. Companies deploying large language models, autonomous coding tools and internal AI agents are generating more logs, traces and interaction data, while also facing scrutiny over where that data is stored and who can access it.

Tsuga's pitch centres on keeping that data within customers' own cloud accounts and reducing the need to choose between lower costs and full visibility. Its engineers work directly with customers to tune deployments over time, with the aim of cutting data processing and retention volumes rather than increasing them, according to the company.

Founded in Paris in 2024, Tsuga has positioned itself in a growing market for tools that help companies monitor the behaviour of AI systems alongside traditional applications and infrastructure. The company said its pricing is based on a single rate per gigabyte of consumption.