Datadog Enters the Experimentation Space with $220 Million Eppo Deal

Datadog has acquired San Francisco-based experimentation startup Eppo for $220 million, marking its third startup acquisition of the year. The move brings experimentation into Datadog’s broader platform ecosystem and makes it the latest and largest company to formally enter the experimentation category.

The acquisition was confirmed in a post by journalist Alex Konrad on X, who noted that Datadog had previously attempted to acquire another competitor in the space before finalizing the deal with Eppo.

Scoop: Datadog is acquiring startup Eppo for $220 million, sources tell me, after trying to buy one of its competitors. It's Datadog's third startup buy this year.

The full story is now in @UpstartsMediaCo subscriber inboxes, and at the link below 👇https://t.co/uVxd8NzU42

— Alex Konrad (@alexrkonrad) May 1, 2025

Founded in 2020, Eppo developed infrastructure for modern product experimentation, with a focus on enabling statistically sound A/B tests, long-term metric tracking, and management of large-scale experimentation programs. Over the past four years, the startup has become a recognizable player in the experimentation category, supporting product teams in building test-driven development workflows.

With this acquisition, experimentation becomes the 57th product listed on Datadog’s website. It joins other developer and infrastructure-focused offerings such as CI visibility, code-level security, mobile app testing, RUM (real user monitoring), and session replay. The addition expands Datadog’s footprint into an adjacent but increasingly strategic category particularly as experimentation practices evolve beyond product optimization toward infrastructure decision-making.

From Product Optimization to Infrastructure-Level Experimentation

Traditionally, experimentation tools like Eppo have served product managers and data scientists. These tools are commonly used to optimize user-facing features such as onboarding flows, retention drivers, and conversion paths. However, recent trends have shown a broader application of experimentation across engineering and DevOps workflows.

Companies like Statsig, which operate in the same space, have noted a growing use of experimentation to evaluate infrastructure changes, for example, running A/B tests to measure the impact of new caching systems, network optimizations, or deployment processes on performance and cost.

These workflows differ from product experimentation in several key ways:

• They operate on higher-frequency deployment cycles
  
• They require integration with release pipelines
  
• They generate high volumes of operational data
  
• And they rely on shared infrastructure with observability and feature flag systems
  

The ability to measure the downstream impact of infrastructure changes has become increasingly important, particularly in environments with continuous deployment. In these scenarios, experimentation supports a deeper level of causal inference answering not only when an issue occurred, but why it happened.

Datadog’s core platform already focuses on real-time observability and diagnostics. The integration of experimentation fits into that framework, supporting faster decision-making around system behavior and release reliability.

Platform Strategy and Consolidation Trend

Datadog has been building toward an all-in-one platform for software teams for several years, and its recent acquisitions have continued to broaden its coverage. Eppo is the third startup acquired by the company in 2025 alone. While details of the other two acquisitions remain undisclosed, the company’s direction is consistent: reduce fragmentation by bringing formerly independent functions like experimentation, testing, security, and analytics into a unified platform.

The company’s architecture allows for the centralization of data across services, which enables seamless integration of tools. This mirrors the approach seen at companies like Facebook, where internal experimentation tools are embedded into the same systems that handle product analytics, dynamic configuration, feature flags, and observability.

In such environments, all tools operate from a single data layer, reducing overhead and preventing conflicts around metrics or data integrity. For engineering teams, this can translate into shorter feedback loops, fewer integration points, and greater reliability in decision-making.

This move also reflects a larger market trend toward consolidation. As demand for experimentation increases particularly in enterprise contexts, vendors that provide single-point solutions are seeing increased competitive pressure. Datadog reportedly explored acquiring another player in the experimentation space before reaching terms with Eppo.

Impact on Existing Users and Market Dynamics

The acquisition positions Datadog to bring experimentation capabilities to a larger user base, especially within its existing install base of SRE, DevOps, and platform engineering teams. These users are already leveraging Datadog for real-time monitoring, infrastructure diagnostics, and deployment visibility making experimentation a natural extension.

Eppo’s focus on statistical rigor and ease of use made it a favored tool among product organizations. However, integration into Datadog’s platform may shift emphasis toward infrastructure testing and DevOps-aligned workflows, rather than long-term product optimization.

There are also likely to be changes in how experimentation is delivered and supported. Datadog’s commercial model emphasizes usage-based pricing, platform bundling, and centralized billing approaches that may differ from Eppo’s prior go-to-market strategy, which included more tailored onboarding and experimentation education.

As experimentation becomes part of the broader observability and deployment workflow, feature priorities may also evolve favoring integration depth over standalone experimentation features like UI-driven program design or test-type expansion.

Eppo’s acquisition continues a wave of consolidation in the experimentation market. As platform providers like Datadog move in, these vendors may face pressure to either integrate more deeply with existing platforms or differentiate through highly specialized offerings.

For Datadog, the acquisition aligns with its long-term goal of owning more of the developer and operations lifecycle providing visibility, security, testing, and now experimentation from a single platform.