Thursday, 8 February 2024, Bengaluru, India
Almost precisely two years ago, Upstash announced a $1.9 million seed investment and their plan to provide a serverless data platform for applications heavy on data and built with Redis and Kafka. The data landscape has seen significant changes since then, even if it doesn’t seem long ago.
(Image Source: Techcrunch.com)
Now, the business is showcasing a $10 million Series A led by a16z, an ARR of $1 million, and a brand-new vector database. In the two years since the company’s founding, there has been a notable shift in the development of generative AI, an application that requires a lot of data.
Enes Akar, the founder and CEO of the company, claims that developers, particularly those utilizing Kafka or Redis for data, have found his consumption-based pricing model—which charges only when data begins to flow through the system—attractive.
The strategy is succeeding, with the company expanding from 12,000 developers in March 2022 to 85,000 today. Such momentum usually draws attention, and according to Akar, Andreessen Horowitz approached him about funding. This tale of investors pulling back on their purse strings is rarely told.
Although Akar claims he wasn’t seeking more cash, he did receive an unsolicited email offering a meeting from a16z in June of last year. Though he joked that he wanted to eat at that place anyhow, he decided to have a conversation, at least when they offered to get some Indian food in downtown Palo Alto. He was more interested in remaining autonomous as he developed the business.
He wanted to maintain his independence for as long as possible, but when it was mentioned during dinner that he didn’t need to form a board of directors to receive this financing, it caught his eye. “I thought it was still rather early. I was still wealthy. Along with other ambitious goals, including developing new products, I told them I wasn’t interested,” he added.
But by August, he was beginning to have second thoughts as he saw generative AI start to take off. Akar, originally from Eskisehir, Turkey, decided to give them another call while on vacation to check whether they were still interested in providing the funds. When it became apparent that they were, they started to bargain. It took about a month for the deal to finalize.
The new vector database, aimed exclusively at AI developers, directly responds to the great interest in this technology and serves as a vital resource for information discovery in generative AI applications. Therefore, before Upstash Vector, we observed a lot of developers utilizing Upstash to create AI apps in conjunction with Hugging Face or OpenAI APIs, and they employed Upstash Redis for data caching and storage. They can utilize Upstash Vector, which we’ve recently developed, in the same way, they can use Pine Cone or other vector databases,” he said.
The company recently appointed his longtime buddy Melek Pelen Esin, who holds an MBA from MIT, worked for McKinsey, and had a sales management role at Facebook as COO. Currently, the company employs about 16 people, many still headquartered in Turkey. While Akar overseas engineering, she manages the company’s business side. Their headquarters are in Silicon Valley.
In the upcoming year, they intend to add another 15 staff members, focusing on providing professional service and achieving client success.
To sum up, Upstash reaching a $1 million ARR milestone after securing seed funding is a testament to its success in the competitive arena of serverless data platforms. The company’s accomplishments underscore its resilience, strategic foresight, and the evident market demand for effective, scalable, and serverless data solutions.
(Information Source: Techcrunch.com)
