Neon
As of June 2026, Neon is a wholly owned subsidiary of Databricks, following a $1 billion acquisition announced in May 2025 and closed later that year.
Profile
Neon provides a serverless PostgreSQL database platform that automatically scales compute and storage, and allows developers to create instant, git-like branches of their database for testing and development.
As of June 2026, Neon is a wholly owned subsidiary of Databricks, following a $1 billion acquisition announced in May 2025 and closed later that year. The company operates as a serverless PostgreSQL database platform that separates compute and storage to enable features like instant branching and autoscaling. Founded in 2021 by Nikita Shamgunov (former engineering lead at MemSQL/SingleStore) and Heikki Linnakangas (a core PostgreSQL contributor), Neon raised approximately $105 million in venture funding prior to the acquisition, including a $30 million Series A-1 in July 2022 led by GGV Capital, and a $25 million strategic investment from Microsoft in August 2024.
The company's product portfolio now extends beyond the core database to include managed authentication, serverless compute functions, S3-compatible object storage, and an AI Gateway powered by Databricks. Neon's customer base consists primarily of application developers and AI/agent builders who need a scalable, branching-friendly Postgres backend. The company does not disclose revenue, but its pricing page shows paid plans starting at $19/month with 500 GB of data transfer.
Post-acquisition, Neon operates as a Databricks company, with its technology being integrated into Databricks' data intelligence platform. The acquisition was reported by TechCrunch on May 14, 2025. Neon's website now prominently features the Databricks logo and branding.
Who buys this
- Application developers building web and mobile apps that need a scalable, branching-friendly Postgres backend
- AI and agent developers who require a database that integrates with AI gateways and supports rapid iteration
- Startups and small-to-medium businesses seeking a serverless database with a generous free tier and pay-as-you-go pricing
- Enterprises using Databricks who want a managed Postgres service that integrates with their data intelligence platform
Strengths and what to watch
Strengths
- Serverless architecture with compute-storage separation enables automatic scaling and instant database branching, reducing the need for manual capacity planning and provisioning.
- Strong financial backing and strategic partnerships, including a $1 billion acquisition by Databricks and a $25 million investment from Microsoft, providing resources for long-term development.
- Open-source core (Apache 2.0 license) with a cloud-managed service, allowing developers to self-host or use the managed offering, and fostering community adoption.
Watch for
- Integration risk: As a Databricks subsidiary, Neon's product roadmap may become increasingly tied to Databricks' platform, potentially limiting its independence and appeal to non-Databricks customers.
- Competition from established cloud providers: AWS Aurora, Google Cloud SQL, and Azure Database for PostgreSQL all offer managed Postgres services with similar features, and they have deeper integrations with their respective ecosystems.
- Revenue and profitability: Neon has not disclosed revenue or profitability metrics, and its generous free tier and low starting price point ($19/month) may indicate a path to profitability that relies on high-volume, low-margin customers.
Key Information
- Industry
- Databases
- Founded
- 2021
Frequently Asked Questions
What is Neon and how does it work?
Neon is a serverless PostgreSQL database platform that separates compute and storage, enabling automatic scaling and instant database branching. It lets developers create git-like branches of their database for testing and development without manual provisioning.
Who owns Neon now?
As of June 2026, Neon is a wholly owned subsidiary of Databricks, following a $1 billion acquisition announced in May 2025 and closed later that year. Neon operates as a Databricks company, with its technology integrated into Databricks' data intelligence platform.
What is database branching in Neon?
Database branching in Neon lets developers instantly create independent copies of their database, similar to git branches. This allows safe testing, development, and experimentation without affecting the main database, and branches can be merged or deleted as needed.
How much does Neon cost?
Neon offers a generous free tier and paid plans starting at $19 per month, which includes 500 GB of data transfer. Pricing is pay-as-you-go, targeting startups and small to medium businesses. Revenue is not publicly disclosed.
What are the main benefits of using Neon?
Neon's serverless architecture with compute-storage separation provides automatic scaling and instant database branching, reducing manual capacity planning. It has strong backing from Databricks and Microsoft, and its open-source core allows self-hosting or using the managed service.
How does Neon compare to AWS Aurora or Google Cloud SQL?
Neon competes with AWS Aurora, Google Cloud SQL, and Azure Database for PostgreSQL, which offer similar managed Postgres services. However, Neon's unique branching and serverless features may appeal to developers, though it faces integration risks as a Databricks subsidiary.
Sources
- techcrunch.com — Databricks acquisition of Neon for $1 billion, announced May 14, 2025
- neon.tech — Neon's current product offerings, pricing, and branding as a Databricks company
- techcrunch.com — Neon's $30 million Series A-1 funding round in July 2022, led by GGV Capital
- techcrunch.com — Microsoft's $25 million strategic investment in Neon in August 2024