Original article published on Dagens Industri (subscription required)
Malmö based Neo is among the fastest growing companies in Silicon Valley. The company has numerous big companies as clients and is valued at 1 billion SEK.
A database that simulates the human brain could be the next big Swedish tech-success. The Big Data company Neo from Malmö is a fast grower in Silicon Valley with a billion value and customers like Walmart, The New York stock exchange and Cisco.
”It’s a mess”, says the founder Emil Eifrem about the hassle that surrounded the creation of the company Neo, which today is on its way to become the next Swedish superstar among the tech-companies.
During the last IT-boom he worked in another newly founded company that needed a better database to handle the big amount of information at their hands.
”We didn’t want to build a database. But I was young and arrogant and said that it couldn’t be that hard. But it was.”
That work came to result in a new approach on how to handle big amounts of data and a company that got the name Neo, short for Network Engine for Objects in Lund.
Fast facts:Early in a hot sector
- Neo was founded at the beginning of the millennium when Emil Eifrem decided to build his own database. Sales and marketing started at a bigger scale in 2011, after 10 years of development.
- In January the company brought in 175 million Swedish kronor from the Swedish VC company Creandum and London based Dawn Capital. Earlier investors, among others Fidelity Growth Partners and Sunstone Capital, was also in on the round.
- The main product, Neo4j, is a so-called graph database that gives fast access to huge amounts of data. Traditional databases collects information in what can be described as a square excel-sheet, whereas Neo4j works as a network or graph, making faster connections between data and searches possible.
- The method is connected to another big trend, Big Data. Big Data is a description of huge amounts of data available to companies that they want to use for analysis and prognosis. A report from Accenture and GE states that 73 percent of the companies places 20 percent of more of their IT budget on analysis of big amounts of data.
- Among companies with Swedish ties, that uses and market Big Data, are Whisper Group as well as the bigger American company SAS (not the airline), where Swedish Mikael Hagström are on the board.
Speed is the key
The key point with the solution, named Neo4j, is its speed. This is especially useful on websites where all information need to be accessed fast.
A hotel chain that quickly produces offers based on the users previous bookings and other digital habits is one plausible use case for a Neo-database. A department store that suggests and recommends what furniture you might like, based on your searches, is another.
Compares it to the brain
The solution that Emil Eifrem has been working on for many years is technical and hard to explain in detail. Emil himself compares it to the human brains rather intricate and lightning fast structure using a square excel sheet that goes through everything one post at a time.
“The best database is the human brain. It can store so much and can sort it and bring it forward very fast.”
The American database Crunch Base is a third example of a function where Neos solution plays a key part. They organize entrepreneurs, companies and investors in Silicon Valley – and it’s a fast process to get information on who has invested in what and what people are on what boards.
Neo recently brought in money from the Swedish VC company Creandum in an investment round that values the relatively unknown company to 1 billion Swedish kronor. Not bad for a company that lists sales at 35 million kronor during 2013.
Very vast growth
Lars Nordwall, leading operations at the company and responsible for sales, says that the growth is between 120-140 percent per year. Big customers are tied in with subscription-based contracts and the company is recruiting at a steady pace, even with competition like IBM and Oracle around the corner.
“If keep growing like this we will be a unicorn, that is a company that is valued at 1 billion dollars or more, at the end of 2017”, says Lars Nordwall with confidence.
Most of todays 100 employees work within programming and development in Malmö. The head office is in San Mateo, a short distance south of San Francisco. There are employees in London and Munich as well and Lars Nordwall is recruiting sales staff in the New York area at the moment.
Ten years to build
One explanation for the rapid growth of the company, according to Lars Nordwall, is the time it took for Emil Eifrem to develop the solution. 2011, the year Lars came aboard, marks the real start of sales and marketing.
“The product has been built during a 10 year period. 2011 was the year it was mature enough to get to the big customers”, says Lars Nordwall.
Among the clients today are big banks like UBS and Nomura, the retail giant Walmart, Ebay, Lufthansa and ICE, which among other things handle the New York stock exchange.
The focus on fast growth is, according to Emil Eifrem, the reason they are not profitable yet. But the plan is to show black figures at the end of next year.
“Graph databases are a word that we came up with a few years back. But the trend with ever increasing volumes of data is ever increasing”, says Emil Eifrem.
Keywords: Big Data Dagens Industri Dat emil eifrem Lars Nordwall Sweden