The Backtrace Story
By Rally Managing Director Charles Beeler
I first met the Backtrace co-founders at a sports bar in South Philly during the 2014 World Cup. Abel Mathew and Samy Al Bahra rented a car and drove down from New York City to meet me while I was in town for a family reunion. I doubt they had planned to pitch the company to my entire family over beers before watching the US narrowly lose to the Netherlands, but there we were.
I was originally introduced to Abel and Samy by Theo Schlossnagle, a Rally Tech Partner and world-class technologist. He was an advisor and early customer of Backtrace, and he said these guys are the real deal: super star technologists building complex technology. If you know Theo, you know to listen when he says something like this.
Shortly after our first meeting, Rally signed on to lead the Backtrace series seed. As is true with most seed deals — we had little idea of the road that lay ahead.
Backtrace provides error monitoring solutions for software teams, and they were the first of their kind to support large-scale mission-critical software. With that disruption came the challenges of positioning. In spite of a solution that far outstripped any competitors, they struggled to gain traction for a number of years until they found product-market fit. It was a tough iterative process based on market and customer feedback, but the hard work and constant focus paid off.
Backtrace today is home to many leading technology companies such as Amazon, Electronic Arts, Square Enix and more. And they were acquired by Sauce Labs — a company that complimented and aligned with their vision of improving the software development lifecycle — in 2021 with an outcome we were all thrilled with.
During the challenging years there were several factors that made it easy to continue to support the founders and the company as they plugged away and built the company. Backtrace is an example of what’s possible with founders who persevere, face challenges head-on and continuously work to find a path forward.
At a high-level, Backtrace provides the means to capture all crash and exception data from an application and a solution to be able to act on that data through analytical insights, automation and integration into adjacent systems. The flexibility, accuracy and scalability of Backtrace’s solution were a perfect fit for the gaming industry.
Whether a game has 100 million monthly active users, or a game is just launching into early access, Backtrace enables game developers to reduce crashes, retain users and ultimately earn more revenue. The impact on user retention and revenue was immediately apparent for Backtrace users. But it took years to get there.
One of the smartest things Samy and Abel did during these years was to have controlled cash burn. They were incredibly efficient and methodical with how they spent money. Even for the most experienced practitioner, it takes work to find product-market fit. There’s a lot of testing and experimentation during the early stages, and when things aren’t working out you have to pull back and make sure you have the runway to try again. This can last for years. It’s critically important to preserve optionality at this stage, and you do that by having controlled burn.
The second thing that made it easy to support Backtrace was how they approached their relationship with us: their investors and the board of directors. We were lucky to have amazing co-investors in this deal, a group of people who worked well together and were resilient during the hard times. We constantly tried to figure out how to move this company forward and stayed the course when things got tough. Everyone in the room was focused on success and willing to take risks to get there.
Abel and Samy were open and honest with us, which can be hard when things aren’t going as planned. As a CEO, you want every board meeting to go well, but that rarely happens. It takes a lot of work to be completely open about what’s really going on and focus on the challenges you face.
We hit a point several years ago when things stalled out and we knew Backtrace would either have to grow or find another home. As a board, we were aware Abel hadn’t experienced an event like that before. Part of our solution was to bring on a board member who could speak to that experience.
Justin Moore joined the board as an independent director, with a key intention being to help Abel break through as a CEO and move the company forward. Justin was a successful entrepreneur, a great cultural fit for the founders and board and had a clear enthusiasm for the business — a true asset for Backtrace.
Abel walked into that relationship with an open mind and trust, which made it possible for him to really benefit from Justin’s insight and feedback. Abel found a mentor in Justin, an ideal outcome for an independent board position, which in turn had a transformative effect on Backtrace.
Justin was particularly instrumental in facilitating key hires like Patrick Bishop to help develop Backtrace’s sales and marketing strategy. Abel excelled as a technical founder / CEO and the founders built a product for a hard problem. The next phase in his founder journey was to drive GTM, and his success learning this part of the business was key to Backtrace’s strong exit. At the same time, Samy really stepped into technical product management and continued to be a technical visionary, all while building and leading an incredibly talented engineering team.
The third reason Abel and Samy were easy to support was how they approached their relationships with customers. They stood out for how they listened to and truly tried to understand their customers’ pain points and growth strategies. Even during the years of slow growth when we were trying to find market fit and new customers, existing customers kept coming back for more, which resulted in net dollar retention rates of more than 140%.
Backtrace did an amazing job keeping customers engaged and driving increased usage. With a NRR around 140% it was obvious the solution worked and was valued by customers, we just needed to find more of them.
Backtrace developed a company-altering partnership with Unity, a cross-platform game engine. After they started to gain traction in the gaming market, Backtrace knew that to really accelerate growth they had to partner with one of the bigger names in gaming. Abel and his team persistently reached out over the course of a year, developing the relationship and learning more about how Unity wanted to grow and evolve.
What eventually bubbled up was Unity’s idea around facilitating a marketplace of independent vendors. They understood that they couldn’t do it all, but robust growth in the gaming space generally was also good for their bottom line. Basically, “a rising tide lifts all boats.”
As an independent vendor in the gaming space, Backtrace aligned perfectly with Unity’s overall marketplace thesis, but they wouldn’t have known this unless the Backtrace team, including folks like Patrick Bishop and Jason Davis, had developed the space and trust to have these conversations. They were only able to see the alignment and connect the dots because of a years-long relationship and alignment around a shared goal.
To Unity’s credit, it is rare that partnerships like this truly flourish but they believed in the Backtrace team and solution, stuck to their own commitments and helped make the partnership a model for how these engagements can work.
Backtrace would not have gotten to this point and had the exit it had without Abel and Samy as founders. Rally was thrilled to partner with them as investors, and now we’re thrilled to have them join us as Tech Partners.
Stay tuned for part two of the Backtrace story, where I’ll dig into more of the details with Abel on his strategy for maintaining low cash burn, persevering through tough times, and much more.