Neo Technology, whose database platform powered the Panama Papers, nabs $36M

Facebook popularized the idea of a “graph” (specifically social graph) to describe the relationship between you and the web of people and interests that surround you, and to help figure out what kind of content you like to see. That’s proven to be a somewhat problematic concept when it comes to social graphs, but it turns out to be an effective concept for how to tackle a number of business problems.

Now a company called Neo Technology, which has developed an open source-based “graph database” that can be used to map and discover relationships across various industries and use cases has raised $36 million in funding to meet that demand.

Neo’s key product is called Neo4j, and it is used by a pretty diverse range of customers. They include Walmart (to figure out what people might like to buy); banks and government organisations (to detect fraud and criminal activity); and the science community (NASA); and the International Consortium of Investigative Journalists. The ICIJ notably used it to parse and make sense of the Panama Papers, a trove of documents that implicates a wave of corruption among politicans, business people and their offshore banking accounts.

To date Neo has had 2.5 million downloads of its product, both enterprise and community versions, with over 200 paying customers and “thousands” of production deployments. 

The Series D comes from new investor, London-based Greenbridge Partners, along with several of Neo Technologies’ existing backers, also out of Europe: Creandum, Sunstone and Fidelity’s Eight Roads Ventures. The funding, coming almost two years after its Series C, takes the total raised by Neo to $80 million.

While the startup isn’t disclosing valuation, CEO and co-founder Emil Eifrem tells us it is was an “opportunistic” and “significant upround”, which the company did not need to raise — it was expecting to become cash-flow positive by the beginning of 2017 — but decided to take anyway to help stave off competition. To give you an idea of where this round places the company, Eifrem said it positions Neo to tip into a billion-dollar valuation in about two or three years’ time.

Headquartered in San Mateo, Neo Technology actually got its start as a smaller project within a content management startup out of Malmo, Sweden — a relational database system “built to think like a brain” that he and co-founder Johan Svensson developed “to give our company more competitive advantage,” Eifrem said. When the company realised they could turn it into a product of its own, they spun out Neo Technologies and Eifrem moved the HQ of the business to the Valley. (R&D has remained in Malmo under Svensson.)

At a time when the enterprise data management world is focusing on new developments around machine learning and predictive analytics, Neo sits as an interesting complement, rather than opposition, to that. It doesn’t pretend to provide an organization with the necessary tools to see what might happen in the future, but it offers the bedrock that helps those other systems work, Eifrem said.

“The trends around big data analytics and machine learning are really important, and if anything people underestimate just how much they are,” he said. “But a lot of machine learning operates at a higher level, and those systems all need to be drawn from somewhere and the conclusions need to be stored and parsed somewhere. We are an awesome storage paradigm.”

Be that as it may, Neo is also working in a space that is getting increasingly crowded, he said. “Over the last twelve to eighteen months, we’ve seen a huge uprising of competitors,” he said. “We used to be alone. We coined the term ‘graph database’! Now IBM, Oracle, SAP and more have announced graph database products.” That’s part of the reason for raising this round now, he added. “Now that the category is taking off, it’s time to accelerate, and that’s why we chose to take the funding.” Other startups in the same space include Datastax and Dgraph.

Despite the profusion of would-be rivals, Neo’s investors see promise in the original. “Globally, we’re generating more data than ever before through more users, devices and digital processes – so much so that a company’s ability to use this data will determine its competitive position in the future,” said Greenbridge’s managing partner Emanuel Lang. “We believe graph databases provide the best technology approach to store, correlate and deliver value from data relationships in real time [and] Neo4j is the undisputed leader in that field – with the largest community and customer base, the best technology and a leadership team that has demonstrated the ability to innovate and execute. When we look at the market forces, combined with Neo Technology’s vision and execution, we believe we are investing in a technology as important as the relational revolution led by Oracle.”