July 27, 2022

Neon Raises $30M for Its Postgres as a Service

Neon, a database management service specializing in Postgres as a service, has raised $30 million in a Series A-1 round, bringing its total funding to $54.3 million.

PostgreSQL, or Postgres, is an open source object-relational database that supports both SQL and JSON querying. According to its developers, Postgres is popular for its reliability, data integrity, robust set of features, and its ability to run on all major operating systems. Many companies are now migrating their operational databases to the cloud as part of their digital transformation strategies, and fully managed database services like Neon can assist with the setup, maintenance, and administration of Postgres on cloud platforms.

Neon’s founders noticed a lack of developer-focused capabilities and features in many cloud-native Postgres database platforms. The Menlo Park, Calif.-based company touts its serverless Postgres service as a modern, robust platform capable of bottomless storage and autoscaling along with easy integration with Amazon S3. The company says its cost-saving architecture separates storage and computing resources with unique features designed to improve the developer experience.

“The Postgres community is already responding to what’s possible with a modern, cloud-native architecture,” said Neon CEO Nikita Shamgunov. “This additional investment ensures Neon is well-positioned to build and ship new features that will transform developer experience.”

Neon’s architecture is shown here. Click to enlarge. Source: Neon

In a blog post,  Neon co-founder Stas Kelvich outlined Neon’s developer-centric features:

  • Serverless: run a compute layer that scales up with traffic changes and down to zero when the database isn’t in use.
  • Branching: Instantly create a branch for your test environments for each code deployment in your CI/CD pipeline.
  • Time machine: reset your database state to a previous point in time without the typical wait time or costs or simply query as of some time in the past.

Neon was co-founded by Kelvich and Heikki Linnakangas, and it was incubated at Khosla Ventures by Shamgunov, who previously founded SingleStore and joined Neon as CEO earlier this year. The company says it will use the new funds to grow its engineering team, build a marketing team, and expand its product roadmap to prioritize developer relations. Kelvich notes that the company has received a promising response from users during its technical preview, as well as a large batch of sign-ups prior to its beta launch and 3,700 stars on Github. “In a short period, the developer community has validated our belief that developers want feature-rich, cloud-based services that enhance, instead of stifle, productivity,” he said.

Investors seem to be on board as well. This latest funding round was led by GGV Capital, and other investors include Khosla Ventures, General Catalyst, Founders Fund, and Elad Gil with support from a group of angels including Nat Friedman, Ajeet Singh, Guillermo Rauch, Wes McKinney, Ryan Noon, and Søren Brammer Schmidt.

“Modern applications are cloud-based, distributed, run at the edge, and perform at unparalleled speeds. At GGV Capital, we’ve been looking for a serverless Postgres-based backend solution that’s tuned to the needs of modern application developers,” said Glenn Solomon, managing partner at GGV Capital and Neon board member. “Nikita Shamgunov and the Neon team have built an incredible solution, empowering developers with the cloud-based backend database they need to complement their front-end projects. Given the strong developer traction, Neon’s future is very bright.”

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