Tsuga Raises $35 Million for Observability in the AI Era

The Paris-based startup Tsuga has closed a Series A funding round of $35 million. The round is led by existing investor Singular. General Catalyst is participating again, along with new investors DST Global Partners and Quantumlight. Picus and Databricks Ventures are also on board.

With the fresh capital, Tsuga aims to accelerate its international expansion and drive the rollout of its platform for “AI-Native Resilient Observability.” The company is addressing a problem that is becoming increasingly critical due to the growing use of AI agents and autonomous systems. Controlling the vast amounts of telemetry data generated by modern AI applications.

When AI Becomes a Cost Issue

Observability solutions help companies monitor applications, infrastructure, and digital processes. For years, the industry’s traditional business model has been based on collecting telemetry data from customer systems and analyzing it in the providers’ cloud infrastructures.

With the increasing use of AI agents, autonomous workflows, and generative AI, the volume of telemetry data generated is rising dramatically. Every agent call, every token interaction, and every automated decision generates additional data streams that must be analyzed and stored. The result: rising costs, an increasing reliance on sampling for data collection, and new governance risks when sensitive corporate data is transferred to external cloud systems.

Data Remains with the Customer

Tsuga’s platform operates directly within the customer’s cloud environment, regardless of whether Microsoft Azure, AWS, or Google Cloud is used. As a result, telemetry data never leaves the customer’s infrastructure. At the same time, this eliminates additional storage and infrastructure costs, as well as the need to reduce data volumes through sampling.

The company promises not only lower costs but also more comprehensive transparency into applications, infrastructure, and AI agents.

Established providers have built successful businesses on a model that no longer works. Every customer we speak with is paying more for observability today than they did two years ago, while receiving less reliable coverage.

Gabriel-James Safar, Co-founder and CEO of Tsuga

Transparency for AI Agents and Autonomous Systems

Tsuga’s approach is particularly interesting given the increasing prevalence of AI agents in enterprises. In addition to traditional infrastructure and application traces, the platform also provides insights into prompts, token usage, confidence scores, and agent call graphs. This gives companies a comprehensive view of their AI systems’ activities—without having to process data outside their security boundaries.

In addition, Tsuga provides tools that enable developers to build and operate their own agents within the enterprise environment.

Software and Services as a New SaaS Model

Tsuga does not see itself as a pure software provider. Instead, its in-house engineers work closely with customers to continuously optimize their observability environments. This is intended to reduce data volumes, lower costs, and improve system efficiency. For investors, this is precisely where a key competitive advantage lies.

Companies no longer have to choose between cost control and complete transparency. They retain full control over their data and AI workloads within their own environment.

Henri Tilloy, Partner at Singular

Revenue in the millions shortly after launch

The company is growing rapidly. Tsuga emerged from stealth mode just six months ago. Today, the startup is already generating several million U.S. dollars in revenue and working with average contract values in the six-figure range. Its customers include the AI company Black Forest Labs, as well as enterprise clients such as Camunda, Le Monde, and Buk.

The funding round demonstrates how strongly investors are currently backing infrastructure companies that address the challenges of the AI era. While many startups are developing AI applications, Tsuga focuses on the layer beneath them: the transparency, control, and security of the systems on which these applications run.

With $35 million in fresh capital, the company now aims to become the European market leader in this very area.