Bugsnag Nabs $7.2 Million in Series A Funding Led By Benchmark

Three-year-old Bugsnag has just nine employees. Still, the company, which has developed an automated crash-detection platform, already counts 22,000 software developers at thousands of companies — including Slack, VMware, GitHub, Docker, Coinbase, and CBS Interactive – as its customers.

Bugsnag also has the backing of Benchmark, which just led a $7.2 million Series A round of funding in San Francisco-based startup, in what sounds like a competitive deal. “We had options,” says Bugsnag’s cofounder CEO, James Smith. (Earlier investor Matrix Partners also participated in the round.)

What’s so interesting about the company, aside from the giant market for debugging software that it’s chasing – a market whose spend has been estimated in the hundreds of billions of dollars?

Broadly speaking, says Benchmark’s Eric Vishria, Bugsnag is operating in a world where software development has become critical to virtually every company on earth and, as a result, is creating two opportunities: one for people to write software and another for companies to help those software developers do their jobs better.

The latter isn’t easy, says Vishria, who has joined Bugsnag’s board and calls developers “a tricky bunch” who “don’t react well to things being forced on them.” Indeed, Vishria says, when Benchmark saw Bugsnag’s adoption numbers, and, importantly, developers paying for its software, the venture firm knew Bugsnag had “clearly hit a nerve.”

Bugsnag — which offers several tiers of service, including everything from a $29-per-month, per-seat self-service plan, to undisclosed rates for enterprises with specific requirements — is not without competitors. Crittercism and Crashlytics are just two other options developers can choose.

Smith insists that Bugsnag has an edge over other products in a variety of ways, however, including that it’s a full-stack error-monitoring package. What that means: it detects errors in web and mobile apps, as well as in every majoring programming language and framework, all of which make it easier to understand – and fix – a crash that happens in one part of the software stack but impacts another, seemingly disconnected part of the stack.

Bugsnag also helps its customers with their log-in logging data, grouping together errors that they’re seeing, so companies know when, say, one million crashes are caused by the same line of code, or that a particular kind of crash happened just once last week but is now creating crashes 25 times an hour. “We’re trying to surface the most important problems without inundating [customers] with [unnecessary noise],” says Smith.

Bugsnag has also endeared itself to developers through basic work flow integration. Software teams are already using team chat, for example, so Bugsnag will post alerts to a team’s chat room.

Smith says he and cofounder Simon Maynard, who were college classmates at the University of Bath, settled on developing Bugsnag owing to their own respective experience with bugs. As an enterprise software consultant working with telecoms, defense, and finance companies, Maynard saw all manner of confusing computer errors. For his part, Smith was a financial software engineer who once built a foreign exchange for users to buy and sell dollars, pounds, and euros. Though it saw a billion dollars in tractions in its first week, it started crashing soon after and it wasn’t immediately clear why.

It was a stressful period at the time for Smith. Benchmark views it as a selling point, though.  “These are incredible guys with a very visceral understanding of the problem,” says Vishria. “It isn’t an accident that they’ve gotten the nuances of their product right. They’ve lived it.”

Bugsnag had previously raised $1.4 million in seed funding, led by Matrix Partners.