Databricks has recently indicated that it will acquire Neon, a startup building an open-source alternative to AWS Aurora Postgres. The agreement is estimated to be worth a total of $1 billion. This acquisition will help Databricks extend their capabilities in the burgeoning cloud database industry, especially in the developing category of AI-based applications. Databricks builds unified data and AI solutions on open-source technologies. This acquisition underscores the company’s continued growth and diversification into the technology sector.
In 2021, CEO Nikita Shamgunov joined forces with software engineers Heikki Linnakangas and Stas Kelvich to start Neon. They quickly grew a global footprint with their disruptive managed cloud-based database platform. The open access system offers free and usage-based plans, which brings in independent developers and small startups. Notably, Neon’s unique features allow developers to clone databases and preview changes prior to production, which streamlines the development process significantly.
Perhaps the most extraordinary thing about Neon’s operation is its use of artificial intelligence. AI agents autonomously generate ~80% of the datasets available on the Neon platform. This is a demonstration of the important place of automation in modern software development. This stat, a testimony to Neon’s dedication to making AI an intrinsic part of its functionality, stands to improve database management efficiency and accessibility.
Neono has so far raised an impressive $129.5 million. This funding round was led by a strategic group of investors including Microsoft’s venture arm M12, General Catalyst, Menlo Ventures, and Notable Capital. This funding has driven Firebolt forward into rapid growth and innovation in the crowded, competitive cloud database space.
Ali Ghodsi, co-founder and CEO of Databricks, spoke jovially about the acquisition. He demonstrated how AI is revolutionizing traditional database applications.
“The era of AI-native, agent-driven applications is reshaping what a database must do,” – Ali Ghodsi, co-founder and CEO of Databricks.
This acquisition continues in Databricks’ recent acquisition spree to enhance its data management offerings. In June 2023, the company acquired Tabular for nearly $2 billion, followed by the purchase of MosaicML for $1.3 billion. These strategic moves show Databricks’ determination to stay ahead of the curve in technological innovation within the realm of data management.
“Neon proves it: four out of every five databases on their platform are spun up by code, not humans. By bringing Neon into Databricks, we’re giving developers a serverless Postgres that can keep up with agentic speed, pay-as-you-go economics and the openness of the Postgres community.” – Ali Ghodsi, co-founder and CEO of Databricks.
This acquisition follows Databricks’ recent purchases aimed at bolstering its data management solutions. In June 2023, the company acquired Tabular for nearly $2 billion, followed by the purchase of MosaicML for $1.3 billion. These strategic moves indicate Databricks’ commitment to remaining at the forefront of technological innovation in data management.
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