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Neon Tech to be Acquired by Databricks for $1 Billion
Neon Tech, a database platform, is set to be acquired by Databricks for $1 billion. This latest startup news was confirmed by the company itself. It is said that this acquisition will help boost its potential in AI-driven data management.
Summary:
1. Neon Tech, a database platform founded in 2021, is set to be acquired by Databricks for $1 billion.
2. Neon, an open-source alternative to Amazon Web Services’ Aurora Postgres database service, has gained popularity among developers due to its ability to compete with agile speed, pay-as-you-go economics, and the Postgres community’s openness.
3. Databricks, a San Francisco-based startup, has raised over $19 billion in funding and closed a $15.3 billion round in January at a valuation of $62 billion.
Founded in 2021, Neon is could base for tech startups to help developers and AI assistants in building new websites and applications.
This is Databricks’ most recent major acquisition; last year, the company paid more than $1 billion for data optimization startup Tabular and $1.3 billion for artificial intelligence model training startup MosaicML.
Databricks said that Neon has more than 18,000 customers. Neon’s clients include OpenAI, Adobe, Boston Consulting Group, Replit, and Vercel, according to its website. Google and Microsoft both offer PostgreSQL database hosting choices in the cloud. Databricks offers software for cleaning up data, executing queries, and running AI models.
Neon, a data management platform and an open-source alternative to Amazon Web Services’ Aurora Postgres database service, has gained popularity among developers. The open-source PostgreSQL database was created in the 1980s. Supabase, a firm whose products have gained popularity with “vibe-coding” tools like Lovable and Figma’s newly introduced Figma Make, is likewise built on PostgreSQL.
Google and Microsoft offer PostgreSQL database hosting choices on their cloud platforms. Databricks offers software for cleaning up data, executing queries, and running AI models.
What is Neon Tech?
Neon, co-founded and led by former Meta and Microsoft engineer Nikita Shamgunov, has received investments from Microsoft, Snowflake, and Databricks. Shamgunov left Meta to run SingleStore, a database startup that was previously known as MemSQL.
Neon charges customers according to the amount of computing and storage capacity they utilize per month. Its software can run on Amazon and Microsoft clouds.
Neon, founded in 2021, is a distributed corporation with more than 130 employees, according to a job description. Databricks, located in San Francisco, was created in 2013 and was valued at $62 billion in a $10 billion funding round revealed in December. Some of the money was set aside for acquisitions.
“The era of AI-native, agent-driven applications is reshaping what a database must do,” said Ali Ghodsi, Databricks co-founder and CEO, in a statement. “Neon confirms it: four out of every five databases on their platform are created by code rather than humans. By integrating Neon into Databricks, we are providing developers with a serverless Postgres that can compete with agentic speed, pay-as-you-go economics, and the Postgres community’s openness.”
According to sources, Microsoft’s venture arm M12, General Catalyst, Menlo Ventures, and Notable Capital are among the investors in Neon, which has raised $129.5 million so far. Databricks, for its part, has raised more than $19 billion in funding and closed a $15.3 billion round in January at a valuation of $62 billion.
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