Exclusive - Open Ocean, a recently established venture capital firm co-founded by the investors who closed the $1 billion sale of MySQL to Sun Microsystems, has just finalized its Fund Three with approximately $60 million (40 million euros) in capital in the first closing, TechCrunch has learned.

The fund kicks off the first widespread outreach from the former MySQL and Nokia team members to founders and startups primarily based in Europe; the focus of the new fund will be squarely on community and open source software ventures.

Open Ocean’s strategy is to start investments at approximately $1 million – with additional performance-based rounds totaling up to $8 million – usually translating to a 10-40% stake in portfolio companies. The target size for the fund is $80 million (60 million euros).

Current investments include SkySQL, WOT, MoSync and Ironstar Helsinki.

The firm is led by partners Patrik Backman, Ralf Wahlsten (who both previously worked for MySQL) and former Nokia executive Tom Henriksson, as well as Michael “Monty” Widenius, the original developer of the MySQL database and co-founder of MySQL.

Good news for the European startup ecosystem.

For your further reading pleasure:

MySQL founders invest in Swedish mobile tech startup Mobile Sorcery (Sept 2009)

Former MySQL CEO Marten Mickos Joins Benchmark As EIR (Sept 2009)

Former MySQL CEO Marten Mickos joins Index Ventures as EIR (Jan 2010)

The news comes four months after the man joined another VC firm, Silicon Valley-based Benchmark Capital, also as EIR.

In a statement, Index Ventures says Mickos will focus on seeking out new investment opportunities within the European technology market, helping to identify and evaluate companies on behalf of the VC firm.

That’s absolutely splendid news for European entrepreneurs and promising startups.

Mickos served as chief executive officer for open source database company MySQL from January 2001 to February 2008, when Sun Microsystems acquired the company for $1 billion.

Just like Benchmark, Index Ventures was a relatively early investor in the company; they participated in the $20 million Series B round together back in 2003.

Mickos holds a M.Sc. in technical physics from Helsinki University of Technology and is also a board member of Mozilla Messaging and RightScale.

(Via @IndexVentures / press release)

A new generation of database products and companies is beginning to emerge, and one of the more interesting examples is Swedish-based Neo Technology, the developer and vendor of the neo4j graph based database (graph in the data structure sense). The neo4j product has been in development for over 8 years, and Neo Technology are today announcing a new $2.5M round of funding. The company has been developing the neo4j project as a commercial product, and is now taking it to market with a dual-license model.

A graph database is a more natural method for expressing, storing and retrieving data that does not fit well in a standard relational database schema. The best example is to consider social networking models, or other models with relationship elements that are either not easily expressed in a traditional table structure or where a table and relationship based structure does not scale.

In a demo of the product we saw, a mock social network structure was created where 1,000 users were defined, each with 50 friends. The traditional table based database took 2,000ms to query every friend from every user, while the graph-based neo4j database took 2ms. To demonstrate the efficiency of the database further, with 1,000 times more users at a million (and an order of magnitude magnitude more connections), the total query time was still 2ms. The graph model and the neo4j database are able to easily scale with complex relationships between entities and with a more flexible schema.

Neo Technology are providing a commercial version of neo4j, Neo, along with services, training and support for the product. The product is licensed under the AGPLv3. The company raised $2.5M from Sunstone Capital and Condor Venture Partners. They previously raising a smaller seed round of $300k from the Swedish government. Neo Technology was founded by a small team lead by CEO Emil Eifrém. The team originally developed the neo4j product as an internal database at a previous company, and have applied the technology in commercial environments for almost 10 years.

Neo Technology are closely following in the footsteps of another Swedish database company, MySQL. They not only share the same home country, but both companies started with a solid open source product, both are database companies and both share a similar business model around open source software.

Neo provides the next generation of database, more suited to most common data problems faced in the real world today. Graph databases are part of a group of technologies of non-relational databases commonly grouped under the ‘NoSQL’ name and movement. The NoSQL movement began with a recent conference in San Francisco, and a conference this week in Atlanta where the Neo Tech was represented.

Most application developers today are not farmiliar with non-relational data storage models, since RDMS dominate the market and most frameworks and language environments have little to no support for alternates. This leads to developers squeezing data models that are not well suited for a table based structure into a database such as MySQL, often leading to poor performance, scalability and reliance on code to do the heavy lifting.

The technology around graph databases was previously usually developed in house by companies who identified specific needs, with some commercial options available. With companies such as Neo Technology supporting a very stable and scalable open source product, the technology is sure to now start to find its way into enterprises and become popular with application developers.

Mickos served as chief executive officer for the open source database company from January 2001 to February 2008, when Sun Microsystems acquired MySQL for $1 billion. Benchmark was a relatively early investor in the company; they participated in the $20 million Series B round together with Index Ventures back in 2003.

Mickos holds a M.Sc. in technical physics from Helsinki University of Technology and is also a board member of Mozilla Messaging and RightScale.

In the tweets announcing the move, Mickos says he likes Benchmark because they care about the needs of entrepreneurs and because they can ‘think big’. He will be joining Keith Krach, Mike Cassidy, Bret Taylor, Jim Norris, Dan Finnegan, Sarah Leary and Nirav Tolia as EIR at the Silicon Valley VC firm, which is behind a number of high-profile investments in web startups like Twitter, Gigya, Prosper, OpenTable, Mint.com and FriendFeed.

Anyone care to venture a guess as to when Mickos’ next Benchmark-backed startup will see the light of day?

And that’s not exclusively a Silicon Valley thing.

Stockholm, Sweden-based Mobile Sorcery has just raised an early-stage investment round amounting up to 1.5 million Swedish Kronor (approximately €145k or $206k USD), for the most part coming from MySQL founders David Axmark and Michael Widenius. Update: the company let us know the reports about the amount of funding are wrong. Although they won’t disclose a number, they informed TechCrunch that the financing round was actually much larger than 1.5 million Swedish Kronor.

You may remember MySQL was acquired by Sun Microsystems back in January 2008 for approximately $1 billion after raising only $39 million in venture capital. It’s safe to say both co-founders walked away with enough cash to use some of it for angel investment in promising companies.

This was actually Mobile Sorcery’s second seed round; it had earlier raised money from STING (Stockholm Innovation and Growth) Capital private equity fund, which also participated in this round. Mobile Sorcery CEO Tomas Uppgård tells ArcticStartup that it exercised a lot of patience before finding someone to fund the startup, but will likely continue to seek follow-up investment in the near future.

Mobile Sorcery, founded in late 2004, specializes in cross-platform development technology for mobile applications, which is obviously not the worst market to operate in these days. Its flagship product is MoSync 2.0, an SDK that enables developers to transforms C / C++ code to mobile platforms such as Java, Symbian and Windows Mobile environments. The fledgling companies plans to open-source the platform later this year, and support for the Android and iPhone platform is said to be underway as well.

Drizzle is a newly announced fork of the open source MySQL project. The developers of the project are taking MySQL back to its roots as a light-weight web application database by removing many of the features introduced in MySQL 5. The fifth version of MySQL was in development for years as some users demanded features such as views, stored procedures, transaction handling, clustering and more. The early releases were bulkier and not as stable as the ultra-popular version 4 of MySQL, and now somebody has forked the codebase into a new project to take the database server back to what it was.

For most web application developers, only a basic database system is required. The original popularity of MySQL was because of its simplicity and ease of use. Postgres was always a full-featured open source database server that offered all the enterprise features of competing commercial systems. MySQL was a lighter alternative which was easy to install and learn, but a lot of that simplicity was lost as the development of MySQL progressed towards competing in the enterprise.

Drizzle would seem to have an instant user audience and developer base amongst those longing for the old MySQL. These developers are likely low to medium-end web application developers using a scripting environment and don’t require or don’t need an advanced database system. MySQL was a key part of the default LAMP stack that pioneered simple web application development which went on to open a whole new market. While MySQL 5 can be componentized and customized, developers seeking a smaller and lighter-weight database can revert to Drizzle, at least until the MySQL team see the demand and offer something themselves.

Sun CEO Jonathan Schwartz wrote about the acquisition on his blog, lavishing praise on MySQL: “MySQL is by far the most popular platform on which modern developers are creating network services. From Facebook, Google and Sina.com to banks and telecommunications companies, architects looking for performance, productivity and innovation have turned to MySQL. In high schools and college campuses, at startups, at high performance computing labs and in the Global 2000. The adoption of MySQL across the globe is nothing short of breathtaking. They are the root stock from which an enormous portion of the web economy springs.”

Startups with similar business models – managing a free open source project and bolting for-pay services on as a business model, will be happy to see this. WordPress and OpenAds are two that we follow closely.

The company, which has raised just $1.1 million in capital, has been on a tear lately. They acquired avatar startup Gravatar earlier this month. And Comscore says WordPress.com had nearly 63 million unique worldwide visitors in September 2007, up 66% from May’s 38 million visitors. What I don’t know is the company’s revenue.

Building a real business around open source software is doable – see RedHat’s $4.1 billion market cap as an example. And rumor is that MySQL is planning an IPO of their own in the near future. For Automattic to spurn a $200 million offer means they are thinking along the lines of going public themselves, or at least a significantly higher acquisition price. Down the road, with the benefit of hindsight, we’ll know if they made the right decision or not.

Automattic declined to comment on this post.

MySQL claims a 25 percent share of the database market. It is unclear how compelling its economics are, but if its IPO does well (assuming it ever happens), that would open the door eventually for other open-source startups such as Openads (open-source ad server) and Automattic (which has built a business on top of the open-source blogging platform, WordPress), among others.