Databricks to Aquire Neon in $1 Billion Deal
Acquisition Strengthens Databricks’ Position in AI-Driven Data Management
Databricks has announced its plan to acquire database management startup Neon in a deal reportedly worth around $1 billion. This move marks one of the largest acquisitions yet for the San Francisco-based data company.
The acquisition is part of Databricks’ ongoing strategy to expand its capabilities in the growing market of AI-driven applications. CEO Ali Ghodsi emphasized that Neon stood out because 80% of the databases on its platform were automatically created by AI agents, not humans — a strong fit for the company’s focus on AI-native tools.
A Major Step in Databricks’ M&A Strategy
This deal is the second-largest in Databricks’ acquisition history, following its $1.3 billion purchase of MosaicML, a generative AI startup, two years ago. The Neon acquisition is also the 13th known purchase by Databricks as it continues to grow both organically and through mergers and acquisitions.
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Strong Financial Backing Fuels Growth
Databricks appears well-positioned for further expansion. Just five months ago, the company raised $10 billion in a late-stage funding round that valued it at $62 billion. It also secured $5.3 billion in debt financing to support its long-term growth plans.
Neon, founded in 2021, had raised about $130 million in venture capital from major backers including Microsoft’s M12 and Menlo Ventures. The startup quickly gained attention for its innovative cloud-native database technology.
Revenue Growth and Future Outlook
The acquisition comes during a strong period for Databricks. According to a CNBC report shared on the company’s website, annualized revenue is projected to hit $2.4 billion by mid-year. That figure reflects a 60% increase compared to the same period last year.
Deal Still Pending Regulatory Approval
The Neon acquisition is not yet finalized and will require approval from regulators before it can close. However, once complete, the deal is expected to strengthen Databricks’ product offerings and reinforce its leadership in the AI and data infrastructure space.