Mela Ventures Investment Thesis on VuNet – Pioneers in Business Journey Observability

VuNet-Mela Ventures
Prachi Malpani

Prachi Malpani

VuNet: Pioneers in Business Journey Observability

Application performance monitoring tools have been in existence for long (since 1990). However, the shift from a monolithic architecture to a micro-services architecture has led to increased complexity to monitor and manage the applications. The traditional Application Performance Monitoring (APM) tools do not fit the bill anymore.

The increasing complexity of applications has led to complex architectures and interfaces – resulting in multiple hops across applications on distributed architectures to complete one business journey. Modern distributed architectures combined with the high volume of transactions make it very difficult for IT teams to monitor and observe transactions – and the traditional infra / App monitoring tools fall short here. Contrast this with the traditional monolithic applications running within a data center – which looks so easy to manage.

As with any problem management effort, enterprises begin to look at monitoring data with the help of multiple tools. These tools provide siloed views into applications, infrastructure, logs, transactions, and traces with an enormous quantity of data to monitor. Without an application or business journey context, all the multitude of alerts across dashboards makes it difficult to identify root causes and faster issue remediation.

The result? Frustrated and demotivated support teams who are barely able to meet targets on MTTD (Mean Time to Detect) and MTTR (Mean Time to Resolve) and equally frustrated end users who have no idea why their transactions failed.

An excellent example of the scenario described above is the digital transactions space. The total digital payment transactions volume in India increased from ~INR 2 billion in FY 2017-18 to ~INR 13 billion in FY 2022-23 at a CAGR of 45 percent. India’s UPI payment system is now used by over 300 million individuals and over 50 million merchants. From just one million transactions in 2016, UPI has since crossed the landmark 12 billion transactions in December 2023.

This combination of high-volume transactions in a complex application environment has given rise to a tool that provides Unified Observability – a method that combines monitoring data from different sources into a single view.

Enter VUNET.  VuNet has built an AI-driven business journey observability platform providing Unified Observability. Unified Observability promotes the actionable use of data by enabling a holistic view across the entirety of a technology stack. It creates dashboards and visualizations that correlate and aggregate anomalies or alerts to present them in the context of issues and helps teams determine their root cause and proactively resolve them. For any enterprise, that manages a huge amount of data, the most valuable opportunity is to connect the dots up and down the stack – from the end-user request down to the lowest level infrastructure – all with a view to answer the question “What happened?”. An Observability tool should start with business-level metrics and trace how these metrics are affected by different application sub-systems and various tiers of infrastructure.

Ever since the first meeting with the VuNet team, we have been impressed to see the powerful combination of domain expertise and the unbeatable passion (of building a product company from India for the world) at play. All the founders come with a decade and a half of experience in building products in a large technology firm. Ashwin, Co-founder & CEO has been instrumental in developing India’s first indigenous carrier-grade router platform. He is an alumnus of IIT Madras and IISc Bangalore.

VuNet’s vuOTT framework provides Deep Observability inside (O), Transparency outside (T), and Traceability (T) across the entire technology stack. Vunet’s ground-up platform and business journey-based observability approach make the entire proposition unique in comparison to competitors.

Most existing tool vendors started with a specific pain point such as logs or Infra or Apps and over time tried to cover the entire breadth – mostly through acquisitions. As a result, the products are not well integrated. They are not able to provide end-to-end transaction and business contextual view.  This results in enterprises using a plethora of tools – which is a challenge to manage.

VuNet’s Deep Observability leads to reducing MTTD and MTTR and ultimately reduces downtime. External business leaders, partners, and regulators can use custom operational dashboards to view failure rates, latency, transaction volumes, and IT/business errors on transactions. With traceability across, it makes it possible to isolate failure points and underlying reasons and extrapolate that data for compliance reporting. Overall Observability spend for VuNet’s target segment translates to $19 Bn. – just across Financial Services and Retail customers.

VuNet’s platform currently handles 20+ billion transactions per month translating to >$900 billion transaction value and on average ingested 40+ TB data per day. Vunet’s solution is widely adopted across marquee logos such as private and public sector banks. The high revenue potential across a single client makes the opportunity even more lucrative. To put things in context, there are 100+ business journeys in each large bank that need observability!

Mela Ventures believes that VuNet has the potential to disrupt this widely recognized but less-addressed problem of Unified Observability with its journey-based Observability Solution. The digital transaction space has been growing exponentially, where even a short downtime can have high consequences in terms of costs and revenues, not to mention compliance and regulatory challenges. And with containerised solutions deployed in a hybrid deployment, unified visibility is key for enterprises to proactively diagnose problem areas and fix issues.