Very easy upgrade from 8.4.3 to 8.5 on Ubuntu using the omnibus packages. I did have to install bundler in my system Ruby (I have RVM on the system; the install scripts executed via apt-get apparently doesn't care), but that was the only hiccup.
You should not have to install bundler on your system to upgrade to 8.5. If someone else encounters this please open an issue so we can diagnose the problem.
Just to be clear. All we need is the output from the console not the actual backup.
What I see from the result your getting is the actual backup command failing. From my experience this might be do to how its executed through the upgrade process and we can have a closer look at what failed when running the create command.
I sent an email, but it looks like if RVM is installed, gitlab-rake may be depending on bundler being installed in the currently-active RVM environment. It looks like RVM may be conflicting with gitlab's bundled Ruby due to RVM setting GEM_PATH and prevents bundler from being found, which causes the upgrade process to fail. Explicitly setting GEM_PATH for the gitlab_rake invocation may fix it.
If bundler is available in the active RVM environment, it works fine.
Correct the GEM_PATH is conflicting. Thank you for the information provided and your help through our support channel. Here is the public issue for future reference: https://gitlab.com/gitlab-org/gitlab-ce/issues/13689.
Can you create a backup with sudo gitlab-rake gitlab:backup:create and send us your results to support@gitlab.com? Please mention its coming from this thread.