Upstash announced a $1.9 million seed round almost exactly two years ago and an idea to build a serverless data platform for data-intensive applications built with Redis and Kafka. It wasn’t that long ago, but a lot has changed in the data landscape since then.
Fast forward to now and the company boasts $1M ARR, a $10M Series A led by a16z, and a shiny new vector database. What has changed in the two short years since the company launched is the development of genetic artificial intelligence, which as you may have noticed is quite a data-intensive application.
The company’s founder and CEO Enes Akar says the idea of creating a consumption-based pricing model, meaning you don’t pay until data starts moving through the system, was exciting for developers, especially those who they use Kafka or Redis for data.
He says the pricing model reduces the risk of app creation. “Consumption pricing is our biggest differentiator in the market because it removes barriers for developers. As a developer, if I start a company, I don’t need to pay until I get real traffic and it becomes very popular,” Akar told TechCrunch.
The approach seems to be working with the company growing from 12,000 developers in March 2022 to 85,000 today. That kind of traction tends to attract attention, and Akar says Andreessen Horowitz actually approached him about funding, not a story you hear much these days in times of tightening investor purses.
He received an unsolicited email last June from a16z offering him a meeting, but Akar says he wasn’t looking for additional funding. Actually, he was more interested in staying independent while he built the business, but when he was offered to discuss Indian food in downtown Palo Alto, he decided to at least talk, because he joked, he really wanted you to try this restaurant anyway.
During the dinner it emerged that he did not need to form a board of directors to receive this funding and this caught his attention due to his desire to remain independent as long as possible. “I felt it was still early. I still had money. I also had some aggressive goals, like creating new products, but I told them I wasn’t interested,” he said.
By August, however, as he watched the generative AI begin to truly exist, he had second thoughts. Akar, who is originally from Eskişehir, Turkey, was back home on vacation when he decided to call to see if they were still interested in providing the funding. It turned out they were and they started negotiating. The deal closed about a month later.
The new vector database, which plays a key role in finding information in production AI applications, is a direct response to the high interest in this technology and specifically targets AI developers. “Well, before Upstash Vector, we had seen a lot of developers using Upstash to develop AI applications along with OpenAI API or Hugging Face API and using Upstash Redis for data caching and storage. Now we’ve introduced Upstash Vector, which they can use just like Pine Cone or other vector databases,” he said.
The company, which currently has about 16 employees, with many of the employees still based in Turkey, recently hired Melek Pelen Esin, his longtime friend, whose background includes an MBA from MIT, a stint at McKinsey and Facebook time in a sales address. position, as COO. She runs the business side of the house, while Akar handles the engineering. They are both located in Silicon Valley.
They plan to hire about 15 more employees in the next year, focusing on professional support and customer success.
