Datadog Strengthens AI Capabilities With Eppo Acquisition

Datadog, a prominent provider of cloud application monitoring and security solutions, has acquired Eppo, a San Francisco-based startup specialising in feature flagging and experimentation platforms. This strategic move aims to enhance Datadog's product analytics and AI-driven experimentation offerings.

The acquisition aligns with Datadog's broader strategy to bolster its AI and analytics capabilities. The company has experienced a 25% year-over-year increase in first-quarter revenue, reaching $761.6 million. This growth is attributed to the rising demand for AI-driven cloud security solutions and the adoption of new products like App Builder and On-Call. Datadog has also raised its full-year 2025 revenue forecast to between $3.22 billion and $3.24 billion, surpassing previous estimates.

Eppo, founded in 2021 by CEO Chetan Sharma, has developed a platform that enables companies to conduct randomized controlled experiments. The platform integrates with data warehouses, cloud services, and AI products, allowing for efficient and rigorous experimentation. Eppo's clients include Twitch, DraftKings, Perplexity, Coinbase, Zalando, Delivery Hero, SurveyMonkey, and Fanatics.

The acquisition is expected to provide Datadog with advanced experimentation tools, enhancing its ability to offer AI-powered personalization and feature flagging. This will enable clients to build products more efficiently and reduce the risks associated with new feature rollouts.

Eppo's platform is designed to support high experiment velocity, allowing companies to run trustworthy experiments faster. By building on Snowflake, Eppo delivers analyst efficiency and data security benefits, enabling customers to upgrade from fragmented and unreliable experimentation workflows to a metrics-first setup.

The integration of Eppo's capabilities into Datadog's platform is anticipated to provide a more seamless workflow for users. This will allow teams to manage their experimentation lifecycle in one place, operating collaboratively and demonstrating return on investment more effectively.

Datadog's acquisition of Eppo reflects a growing trend in the industry, where companies are seeking to enhance their AI and analytics offerings through strategic acquisitions. This move positions Datadog to better serve its clients by providing more comprehensive tools for monitoring, security, and experimentation in cloud environments.

The financial details of the acquisition have not been disclosed. However, the move is seen as a significant step in Datadog's efforts to expand its product offerings and maintain its competitive edge in the rapidly evolving cloud services market.

Eppo's team, which includes former employees from Airbnb, LinkedIn, Uber, and Snowflake, brings a wealth of experience to Datadog. This acquisition is expected to accelerate Datadog's innovation in AI and analytics, providing clients with more robust tools to navigate and secure modern cloud environments.

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