Database pioneer continues to scale at $2B+ valuation as GenAI accelerates demand
SAN MATEO, Calif., Nov. 19, 2024 /PRNewswire/ -- Neo4j®, the world's leading graph database and analytics company, announced that it has surpassed $200 million in annual recurring revenue (ARR), doubling its ARR over the past 3 years. The company is on track to be cash flow positive in the coming quarters, driven by its leadership in the expanding graph technology market, which is critical for improving the accuracy, transparency, and explainability of Generative AI (GenAI) results.
Neo4j grew rapidly this year as organizations recognized graph databases as essential infrastructure for AI systems that leverage vast amounts of interconnected data. Neo4j serves as the optimized database for these applications. Growth was also driven by enterprise demand for Neo4j's cloud offering which has increased fivefold over the last three years, and partnership traction with leading cloud hyperscalers and ecosystem leaders.
"By 2025, graph technologies will be used in 80% of data and analytics innovations, up from 10% in 2021, facilitating rapid decision-making across the enterprise," predicts Gartner® in its Exploring the Top Use Cases for Graph Analytics report, May 10, 2024.
Neo4j leads the graph database management systems (DBMS) category with a 44% market share, based on an analysis by Cupole Consulting Group. Cupole estimates the total addressable market for the broader DBMS category at $110 billion in 2024, with graph DBMS growing at 32.6%+ CAGR driven by cloud adoption and emerging AI use cases.
Neo4j is used by 84% of all Fortune 100 companies and 58% of the Fortune 500. Examples include Daimler, Dun & Bradstreet, EY, IBM, Merck, NASA, UBS, Walmart, and others.
GenAI's growing demand for graph databases and GraphRAG
Graph databases enable companies to store and query data in a way that mirrors how real-world entities are connected. Data is expressed as a knowledge graph, which grounds large language models (LLMs) in facts and rich context and gives AI systems better, faster access to relevant data critical for generating high-quality outputs.
Neo4j is also a leader in GraphRAG, a technique that enables LLMs to retrieve data from external sources, augmenting these systems with knowledge and preventing hallucinations. Gartner noted the importance of GraphRAG in its Hype CycleTM For AI in Software Engineering, 2024 report: "RAG techniques in an enterprise context suffer from problems related to the veracity and completeness of responses caused by limitations in the accuracy of retrieval, contextual understanding, and response coherence. KGs (Knowledge Graphs), a well-established technology, can represent data held within documents and the metadata relating to the documents. Combining both aspects allows RAG applications to retrieve text based on the similarity to the question and contextual representation of the query and corpus, improving response accuracy."
2024 milestones accelerate Neo4j as the default database for interconnected data
Neo4j enables builders to make their data GenAI-ready and create applications faster and easier with outcomes that are accurate, transparent, and explainable to normal humans. In 2023, Neo4j incorporated native vector search into its core database capabilities for richer GenAI insights. In 2024, Neo4j brought its graph data science solution to Snowflake AI Data Cloud, expanded its alliance with Deloitte, and continues to offer native integrations with LLM offerings across all major hyperscalers that are current with their updates. Neo4j also transformed its cloud portfolio this year to accelerate graph adoption and GenAI for the enterprise.
The result has enabled Neo4j to advance its position as the category leader and the preferred graph partner across all major cloud service providers for its comprehensive offering, deployment flexibility, analytics, and strong community support, and accelerated further with GenAI.
Neo4j was named a Visionary in the 2023 Gartner® Magic Quadrant for Cloud Database Management Systems among 19 other recognized global DBMS vendors. Neo4j was also ranked this year as a Strong Performer among 14 top vendors in The Forrester Wave: Vector Databases, Q3 2024.
2025 growth fueled by new AI capabilities, cloud expansion, partnerships
Neo4j plans to add new GenAI features to its core offering, expand its capabilities for mainstream cloud adoption, and deepen partnerships to serve as the default graph analytics and GraphRAG layer.
The company recently secured $50 million in capital from Noteus Partners, a European specialist growth equity investment firm. While Neo4j is well capitalized and does not need the capital to run its business, the investment strengthens its balance sheet in the current macroeconomic climate, reaffirms the company's $2 billion valuation, and underscores the Neo4j's commitment to partnering with organizations it trusts and believes in.
Graph is expected to accelerate further with ISO and IEC's 2024 publication of GQL, a new international standard for graph query language, signifying the maturity and omnipresence of graph technology. It is the first database query language to be certified since SQL in 1987. ISO invested more than five years of work into GQL with Neo4j involved from the start.
Supporting quotes
Sebastian Siemiatkowski, Co-Founder and CEO, Klarna
"At Klarna, we're transforming the way we collaborate with our GenAI chatbot Kiki, powered by Neo4j's knowledge graph. Kiki brings together information across multiple disparate and siloed systems, improves the quality of that information, and explores it, enabling our teams to ask Kiki anything from resource needs to internal processes to how teams should work. It's having a huge impact on productivity in ways that were not possible to imagine before without graph and Neo4j."
Patrick Pichette, Partner, Inovia Capital
"Neo4j is an amazing story of innovation leadership, growth, and market-defining maturity. And with GenAI now moving from experiment to deployment, graphs are now becoming a foundational layer for so many critical LLM business applications; Neo4j stands as a clear leader in the space."
Carl Olofson, Vice President, IDC
"Neo4j pioneered the category of graph databases and continues to lead as an innovator, offering solutions that are increasingly vital for businesses managing complex, interconnected data. As demand for AI and advanced analytics grows, the role of graph technology will only become more critical for driving meaningful insights and decision-making."
Emil Eifrem, Co-Founder and CEO, Neo4j
"This milestone is a testament to the growing recognition of graph technology as foundational to the new data stack. Neo4j empowers customers to transform data into knowledge, unlocking insights and possibilities that weren't possible before. We're now at the forefront of a seismic shift in how organizations achieve this with GenAI, with Neo4j uniquely positioned to enable this new wave of innovation."
Attributions and Disclaimers
Gartner, Magic Quadrant for Cloud Database Management Systems, Adam Ronthal, Rick Greenwald, Xingyu Gu, Ramke Ramakrishnan, Aaron Rosenbaum, Henry Cook, 18 December 2023
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
About Neo4j
Neo4j, the Graph Database & Analytics leader, helps organizations find hidden relationships and patterns across billions of data connections deeply, easily, and quickly. Customers leverage the structure of their connected data to reveal new ways of solving their most pressing business problems, from fraud detection, customer 360, knowledge graphs, supply chain, personalization, IoT, network management, and more - even as their data grows. Neo4j's full graph stack delivers powerful native graph storage with native vector search capability, data science, advanced analytics, and visualization, with enterprise-grade security controls, scalable architecture, and ACID compliance. Neo4j's dynamic open-source community brings together over 250,000 developers, data scientists, and architects across hundreds of Fortune 500 companies, government agencies, and NGOs. Visit neo4j.com.
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