Databricks in talks to acquire startup Neon for about $1B
53 comments
·May 5, 2025forgetfulness
What is the lowdown on Databricks? Their bread and butter were hosted Spark and notebooks. As tasks done in Spark over a data lake began to be delegated wholesale to columnar store ELT, they tried to pivot to "lake houses", then I sort of lost track of them after I got out of Spark myself.
Did Delta Lake ever catch on? Where are they going now?
richardw
Capture enterprise AI enthusiasm by providing a 1-stop shop for data and AI, optionally hosted on your own cloud tenant. Keep deploying functionality so clients never need another supplier. Partner with SAP, OpenAI, anyone who holds market share. Buy anyone that either helps growth or might help a competitor grow.
Enterprise view: delegate AI environment to Databricks unless you’re a real player. Market is too chaotic, so rely on them to keep your innovation pipeline fed. Focus on building your own core data and AI within their environment. Nobody got fired for choosing Databricks.
newfocogi
They offer serverless Postgres. Here's a link if anyone else needs it https://neon.tech/
yalogin
A tangential question here, will Databricks ever go public? At this point it's a large company making billion dollar acquisitions.
For someone looking to join the company, I cannot imagine IPO to be a motivation anymore.
manquer
Later stage things are , the potential IPO is a benefit not deterrent. Recruiters and hiring managers will hint at potential IPO being not far off as an incentive to join. It minimizes risk, they do same for potential target’s founders like Neon here .
This is better than earlier stage startups , while you get far better multiples , it is also quite possible that you are let go somewhere into the cycle without the money to vest the options for tax reasons and there is short vesting period on exit.
For this reason companies these days offer 5/10 yr post leaving as a more favorable offer
——
For founders it is gives them a shorter window to a exit than on their own, and in revenue light and tech heavy startup like neon (compared to databricks) the value risk is reduced because stock they get in acquisition is based on real revenue and growth not early stage product traction as neon would be today .
They also have some cash component which is usually enough to buy core things in most founders look at like buying a house in few million range or closing mortgages or invest in few early stage projects directly or through funds
ww520
If they are making money, there is no pressure to raise money from IPO.
kyawzazaw
they can do employee liquidity event
yalogin
That is not the same as an IPO right?
manquer
No, basically it is a buy back of employee options and stock .
Many companies raise money only to give liquidity to founders / employees and some early investors even if they don’t money for operations at all.
While Databricks is large , there are much bigger companies which would have IPOed at smaller sizes in the past which are delaying (may never do) today. Stripe and SpaceX are the biggest examples both have healthy positive cash flows but don’t feel the value of going public . Buying back shares and options is the only route if you don’t have IPO plans if you want to keep early stage employees happy
hgontijo
Company offers to purchase employee pre-ipo shares.
VirusNewbie
Why does it matter if you get liquidity events 2-4x per year
thiagoeh
Looks like the acquihire of Bit.io in 2023 wasn't enough to be able to deliver their own OLTP offering
https://blog.bit.io/whats-next-for-bit-io-joining-databricks... https://www.databricks.com/blog/welcoming-bit-io-databricks-...
Or it's just a business decision to corner the market, as someone else said
klabb3
They aren’t exactly hiding it. I kept my eye on bit.io because they looked very promising. Next day, gone. Shut down immediately. Something is fucky with the investment pipeline because it’s not ”worth” that much on its own, it’s a market dominance play, bad for innovation..
mcmcmc
> Or it's just a business decision to corner the market, as someone else said
Given how lax antitrust enforcement is, probably this
datadrivenangel
Databricks is trying hard to get into serverless, but it seems like they refuse to allow it to actually be cheaper, which defeats the purpose of serverless.
programmertote
I had an interview with a senior data engineering candidate and we were talking about how expensive Databricks can get. :D I set up specific budget alerts in Azure just for Databricks resources in DEV and PROD environments.
thrance
I don't think being cheaper is the main value sell of serverless. When I hear "serverless" I think "ease of deployment and automatic scaling".
whateveracct
Right but ultimately that's a cost thing, right? Because you can solve those problems through other means and by hiring internally.
Serverless is meant to obviate some of that. But it is less compelling when the vendor tries to gobble up that margin for themselves.
sitkack
You will all forced to go serverless because new grads can't use the command line. Running a database is about the hardest thing you can do. If it is serverless, you don't need special skills, preventing employees from becoming valuable lowers costs across the board.
999900000999
Supabase just raised 200 million.
What’s with all these Postgres hosting services being worth so much now?
Someone at AWS probably thought about this, easy to provision serverless Postgres, and they just didn’t build it.
I’m still looking for something that can generate types and spit it out in a solid sdk.
It’s amazing this isn’t a solved problem. A long long time ago, I was apart of a team trying to sort this out. I’m tempted to hit up my old CEO and ask him what he thinks.
The company is long gone…
If anything we tried to do way too much with a fraction of the funding.
In a hypothetical almost movie like situation I wouldn’t hesitate to rejoin my old colleagues.
The issue then, as is today is applications need backends. But building backends is boring, tedious and difficult.
Maybe a NoSql DB that “understands” the Postgres API?
investa
Building backends is easy. It is sort of weird. In 2003 no one would bat an eyelid at building an entire app and chucking it on a server. I guess front-end complexity had made that a specialism so with all that dev energy drained they have no time for the backend. The backend is substantial easier though!
These high value startups timed well to capture the vibe coding (was known as builidng an MVP before), front end culture and sheer volume of internet use and developers.
999900000999
It’s harder than signing up for Firebase.
You have to understand a separate set of concerns. Spin something up on ec2, hook it into a db, configure https , figure out why it went down, etc.
You’re right though, once I build a complex front end I want someone else to do the backend.
_bohm
"Easy to provision" is mostly a strategic feature for acquiring new users/customers. The more difficult parts of building a database platform are reliability and performance, and it can take a long time to establish a reputation for having these qualities. There's a reason why most large enterprises stick to the hyperscalers for their mission-critical workloads.
investa
That reason also includes SOC2, FedRAMP, data at rest jurisdiction, availability zones etc. And if large enough you can negotiate the standard pricing.
_bohm
For sure. And oftentimes these less sexy features or certifications are much more cumbersome to implement/acquire than the flashy stuff these startups lead with
zamderax
Supabase is particularly valuable for its users. Or right now “vibecoders”
markus_zhang
I'm confused. I saw users left Databricks left and right. Two companies I worked for previously got out of it due to cost.
Do they still have a lot of $$$?
hgontijo
markus_zhang
Thanks. OK they still have a lot of money.
User23
Meanwhile here I am wondering why everyone isn’t using SQLite.
clpm4j
I've been seriously considering neon for a new application. This definitely gives me pause... maybe plain ol' Postgres is going to be the winner for me again.
jedberg
Why would this give you pause? You just don't want the data to be where Databricks is?
Either way, there are plenty of other serverless Postgres options out there, Supabase being one of the most popular.
MOARDONGZPLZ
Can’t speak for anyone but myself and my experience anecdotally, having used Databricks: I consider them to be the Oracle of the modern era. Under no circumstances would I let them get their hooks into any company I have the power from preventing it.
clpm4j
This is exactly how I feel. I do not want to be in the Databricks ecosystem.
thor24
Why do think so? Databricks notebook product I have used in couple of companies is pretty solid. I have done any google research but they are generally known to be very high talent dense kind of place to work.
omneity
Supabase, while a great product, does not offer serverless Postgress.
jedberg
What would you say they offer then if not serverless Postgres?
You set up a database, you connect to it, they take care of the rest. It even scales to $0 if you don't use it.
Is that not serverless Postgres?
greenavocado
> Why would this give you pause?
After a funding round the value extraction from customers is just over the horizon
vibhork
Try Supabase!
taw1285
I am fairly new to all this data pipeline services (Databricks, Snowflakes etc).
Say right now I have an e-commerce site with 20K MAU. All metrics are going to Amplitude and we can use that to see DAU, retention, and purchase volume. At what point in my startup lifecycle do we need to enlist the services?
speakfreely
A non-trivial portion of my consulting work over the past 10 years has been working on data pipelines at various big corporations that move absurdly small amounts of data around using big data tools like spark. I would not worry about purchasing services from Databricks, but I would definitely try to poach their sales people if you can.
joshstrange
Well this isn't great news. I quite enjoy using Neon but I doubt it's going to continue to cater to people like me if it's bought by Databricks (from the little I know about them and from looking at their website).
Thankfully, I just need "Postgres", I wasn't depending on any other features so I can migrate easily if things start going south.
Wow, $1B.
I've been bullish on neon for a while -- the idea hits exactly the right spot, IMO, and their execution looks good in my limited experience.
But I mean that from a technical perspective. I never have any real idea about the business -- do they have an edge that makes people want to start paying them money and keep paying them money? Heck if I know.
I guess that's going to be Databricks problem now (maybe).