Insight Partners led a $46 million Series B fundraising round for Instabug, a firm that promises to assist mobile developers monitor, discover, and resolve bugs within apps.
The funding comes little over two years after the company raised $5 million in a Series A round led by Accel, which increased its stake in the new round. Forgepoint Capital and Endeavor joined the round as new investors. The corporation has refused to publish its current market value. The latest funding takes the company’s total stock raised to $54 million.
Since its last raise, a lot has changed for Instabug, which has offices in both Cairo and San Francisco. For one reason, the company has shifted its attention away from bug and crash reporting and toward developing application performance monitoring software “to capture everything around mobile performance.”
During its term at Y Combinator, the company was created in 2013, first published its offering in beta in 2015, and then publicly debuted in February 2016. Instabug CEO and co-founder Omar Gabr told in an article that the company’s recent move to expand into monitoring was motivated by the fact that users have higher expectations from the applications they use, and firms need to be more proactive to prevent bugs from arising in the first place. For example, he claims that four years ago, it was deemed good if an app didn’t crash. Users today want programs to not just not crash, but also to be smooth and fast.
“Our goal is to make sure that the developers and the engineering teams who are building apps have full visibility about how that app operates and is performing,” he told in a news report. “We want to give them the right tools so they can be proactive. For example, so they can see if an issue is happening, and understand what’s going on before a user is giving bad reviews or ranting on Twitter.”
According to Gabr, Instabug had “record” growth in 2021, with its ARR doubling and the number of enterprise customers double, bringing in new clients like DoorDash, Verizon, Qualtrics, Porsche, and Gojek to join current ones like Clubhouse. According to him, Instabug has “many” Fortune 500 firms and top 100 apps on the app store as customers.
With so much enterprise adoption, Instabug spent more money last year on compliance and security so it could onboard huge organizations like banks and telecoms. One of the key drivers of the company’s revenue development has been attracting more enterprise clients.
When an app breaks, Instabug immediately sends a notification to the consumer. However, the business claims that it goes beyond crash reporting to provide mobile developers with granular information such as where issues are located, how an app performs in general, and when it fully fails.
Instabug operates on a standard SaaS business model, charging companies building mobile apps an annual subscription fee based on the size of the app. For example, if a company’s app has fewer than 10,000 monthly active users, the product is free. According to Gabr, as a company grows and more sessions are conducted on their app, they pay more. In other words, Instabug’s revenue is directly proportional to the number of sessions processed on its customers’ apps.
While the company was once profitable, it is no longer so (as it has been doubling down and investing more in growth), according to Gabr, who claims his team has been “really capital efficient.” It plans to use its new funding to increase hiring and invest in product development. It currently employs 190 people, the majority of whom are engineers based in Cairo.