Highlight Report

Record investment in Neo4j suggests, maybe it IS all about relationships

June 25, 2021

Graph database business Neo4j has taken the largest Series F investment in database history – landing $325m to accelerate its cloud portfolio, invest in enhanced machine learning models to unlock new predictions, and expand its global footprint.

Graph databases are designed to treat the relationships between data with the same importance as the data itself. They are used to make real-time recommendations, in fraud detection, network and IT operations, identify and access management, and master data management. They excel where there is a need to manage highly connected data and handle complex queries.

Examples include determining the price of an airline ticket in real-time, exposing complex criminal networks in cyberattacks, and money laundering activity.

Open-source and graph native solution now serves 75% of the Fortune 500

Neo4j is an open-source NoSQL ‘native’ graph database (native, because it is designed for graph workloads in storage, memory management, query engine, and language), in development since 2003 and publicly available since 2007. The Enterprise Edition offers backups, clustering, and failover abilities.

Serving more than 75% of the Fortune 500, Neo4j’s customers include household names such as Comcast, Allianz, eBay, Dun & Bradstreet, IBM, Boston Scientific, IBM, Microsoft, UBS, and Astra Zeneca. The new investment is on a valuation of just over $2bn.

Emil Eifrem, Neo4j’s CEO and Co-Founder, sees the investment as an inflection point in the database market. He said the market is growing for new databases that address today’s data challenges in new ways. He describes his own firm’s sales as ‘rocketing’ over the past year.

“This is a magical time in databases, presenting an opportunity for a handful of generational companies to emerge as leaders in the broader landscape. This record-breaking transaction in the database space demonstrates that,” he added.

Data is your strategy – graph can deliver the data to win in your market

HFS CEO and Chief Analyst Phil Fersht says enterprise leaders should make data their strategy.

Get the data to win in your market. Align your data needs to deliver on business strategy. This is where you clarify your vision and purpose.”

Applying the graph is an important step on the HFS Data cycle (Exhibit 1) – helping the enterprise access appropriate, decision-driving data, connecting the dots that lead to the insights that can help anticipate customer needs and behaviors.

Exhibit 1: HFS Data Cycle shows how OneOffice starts and ends with data

Source: HFS Research, 2021

$325m to focus on multi-cloud services, graph data science, and global reach

Cloud investment will focus on delivering a portfolio of multi-cloud services for everyone from individual developers through to the largest global enterprises. The business will also invest in developing its graph data science – with the intent of powering intelligent applications applying enhanced machine learning models to extend prediction capabilities based on relationships.

The funding will also support the extension of its ecosystem of complementary technologies and expert service providers to deliver across the globe. It currently employees more than 500 staff and is headquartered in San Mateo, California.

But it won’t have it all its own way; large database players such as Oracle and SAP have entered the fray – alongside start-ups such as TigerGraph. There is an alternative open-source platform in JanusGraph, too.

Microsoft and Amazon have their own graph databases, though Google, to date, does not. Google – through its GV Google Ventures, is an investor.

Existing investors One Peak, Creandum, and Greenbridge Partners invested again in this round, alongside new investors DTCP and Lightrock, and GV, with Eurazeo leading the round.

The Bottom Line: Rise of process automation triggers urgency for graph databases

The more the world becomes connected and interconnected, the more graph databases become an urgent business need. Neo4j offers enterprises the ability to analyze and visualize the interconnectedness leaders must be in a position to manage as process automation continues to be prioritized for investment. We only expect demand for their services to increase in the near term. They have an impressive roster of OEM partners – including HP, Precisely, Cisco and Swimlane. Technology partners include Google Cloud, Microsoft Azure, AWS, Tableau, Sisense, Confluent, and Hackolade. Now it’s time for Neo4j to scale its reach with the global Service Providers.

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