Neon was founded in 2021 by Nikita Shamgunov (co-founder of SingleStore/MemSQL) and Heikki Linnakangas, a long-time PostgreSQL contributor. The company is based in San Francisco and came out of stealth in June 2022 with a bold pitch: rethink PostgreSQL for the cloud by separating storage from compute.
That architectural choice is what makes Neon different. By decoupling these layers, Neon can scale compute to zero when there’s no activity (so you don’t pay for idle databases), spin up branches of your database in seconds for development and testing, and offer point-in-time restore without traditional backup hassles.
Neon raised $104 million in a Series B round in 2023, bringing total funding to over $160 million. The platform has attracted attention from developers building on frameworks like Next.js, and it’s become a popular choice for serverless applications where cold start times and cost matter.
Because it’s fully compatible with PostgreSQL, existing Postgres tools and libraries work out of the box. Neon also offers a generous free tier — which PlanetScale’s removal of theirs made even more attractive — and has partnerships with Vercel and other platforms. The database branching feature is particularly useful for CI/CD pipelines, where each pull request can get its own isolated database copy. For teams that love Postgres but want modern cloud-native features, Neon is a compelling option.
