Neeva

Neeva was an ad-free, subscription-based search engine founded in 2019 by former Google executives Sridhar Ramaswamy and Vivek Raghunathan.^13568914 The company shut down its consumer search product on June 2, 2023, citing difficulty in convincing users to switch from Google and the economic environment.^13568914 Neeva was acquired by Snowflake in 2023 for approximately $184.4 million in cash, and its technology was intended to enhance Snowflake's search and conversational experiences.⁹¹⁴

Timeline

Money raised

Neeva raised $37.75 million in Series A funding on June 22, 2020, from Greylock Partners, Sequoia Capital, and SV Angel.¹⁰ Neeva raised $40.17 million in Series B funding on March 8, 2021, from Greylock Partners, Inovia Capital, and Sequoia Capital.¹⁰ Neeva raised $1 million in Series B-1 funding on March 21, 2023, at a post-money valuation of $269.59 million.¹⁰ Neeva raised $3 million in Series B-2 funding on March 21, 2023, at a post-money valuation of $269.59 million.¹⁰ Neeva raised a total of $77.5 million in funding prior to being acquired by Snowflake.⁹ Snowflake acquired Neeva for approximately $184.4 million in cash.¹⁴

Investors named in the sources: Greylock Partners⁹¹⁰, Sequoia Capital⁹¹⁰, Inovia Capital¹⁰, SV Angel¹⁰, Ram Shriram⁹.

What happened

Neeva was founded in 2019 by Sridhar Ramaswamy and Vivek Raghunathan, both former Google executives.⁶⁸⁹¹⁴ Sridhar Ramaswamy worked at Google from 2003 to 2018 and held senior posts where he reported to the CEO and managed Google's ads, commerce, search infrastructure, and privacy teams.¹⁴ Vivek Raghunathan was a former VP of Monetization at YouTube.⁵ Neeva aimed to create a subscription-based search engine that would respect users' privacy and not show ads.⁹ Six months later, Neeva added a free tier to the mix.⁶

By 2022, Neeva said it had amassed more than 600,000 users, though the vast majority of those were on a free plan.⁶⁸¹⁴ Neeva went on a rapid global expansion exercise starting with Europe in October 2022.⁶ Neeva built its own search stack from the ground up, running a crawl that fetched petabytes of information from the web.⁵⁸ Neeva initially offered to serve results via Microsoft's Bing while it developed its own search infrastructure.¹⁴ By 2022, Neeva was using its own techniques for ranking web results and believed itself to be comparable to Google and better than Bing thanks to its use of machine learning, natural language processing, and other techniques.¹⁴

Neeva launched a generative AI feature called Neeva AI, which provided cited, real-time AI answers to a majority of queries.⁵⁶¹⁴ Neeva also developed a standalone generative AI search app called Gist, which was made available on Android.⁶ Neeva faced significant challenges attracting new users.^1356814 The co-founders said that building a search engine was hard, but convincing users to switch from Google was even harder.^1356814 Neeva cited Google's billion-dollar deals to be the default search engine on devices, popups when changing search engines, and difficulty in finding settings as obstacles.¹³

The co-founders said that convincing users to pay for a better experience was less difficult than getting them to try a new search engine.¹³⁵⁶⁸ The difficult economic environment contributed to Neeva's decision to shut down its consumer search product.^1356814 Neeva announced on May 20, 2023, that it would shut down neeva.com and its consumer search product and shift to a new area of focus.^13568914 Neeva said it would refund existing subscribers and delete all user data.¹³⁵⁶⁸ Neeva shut down its consumer search engine on June 2, 2023.^13568914

Neeva pivoted to focus on enterprise use cases of large language models and generative AI.^13568914 Snowflake announced on May 24, 2023, that it had agreed to acquire Neeva for an undisclosed amount.⁹ Snowflake completed the acquisition of Neeva during the three months ended July 31, 2023.¹³ Snowflake acquired Neeva for approximately $184.4 million in cash, according to a court filing.¹⁴ Neeva was generating less than a million dollars in subscription revenue at the time of the shutdown.¹⁴

Neeva's inability to compete with free search led to the closure of its consumer business and pivot to enterprise.¹⁴ Neeva was unable to attract the necessary venture capital funding to continue to scale its business.¹⁴ Sridhar Ramaswamy testified that he and his co-founder came to the reluctant conclusion that they would not be able to build up a business fast enough to continue raising capital.¹⁴ Neeva refunded the money that customers had paid and got acquired by Snowflake.¹⁴ Snowflake's CEO Frank Slootman said that Neeva would enable Snowflake users and application developers to build rich search-enabled and conversational experiences.⁹

Snowflake's SVP of product Christian Kleinerman said that Neeva's technology would help bring a new type of experience to Snowflake users within the security perimeter of Snowflake.⁹ Neeva's acquisition was considered an acquihire by some observers.⁷ Neeva's technology was intended to help Snowflake break into machine learning and data science.⁷ Neeva's founders and team joined Snowflake as part of the acquisition.⁷ Neeva's consumer search product was shut down and its website neeva.com was taken offline.^13568914

Neeva's user data was deleted as part of the shutdown.¹³⁵⁶⁸ Neeva's paid subscribers received refunds for the unused portion of their subscriptions.¹³⁵⁶⁸ Neeva's employees were part of the acquisition by Snowflake.⁷

Lessons, as others put them

"Throughout this journey, we've discovered that it is one thing to build a search engine, and an entirely different thing to convince regular users of the need to switch to a better choice."Sridhar Ramaswamy and Vivek Raghunathan¹³⁵⁶⁸

Sources

1. Google search competitor Neeva shuts down to focus on enterprise - SiliconANGLE, SiliconANGLE, 2023-05-22
3. Neeva, the would-be Google competitor, is shutting down its search engine, The Verge, 2023-05-20
5. Neeva shuts down privacy search engine to focus on AI for business, Coywolf, 2023-05-22
6. Google challenger Neeva gives up on consumer search, goes all in on AI and the enterprise | TechCrunch, TechCrunch, 2023-05-21
7. What Neeva's quiet exit tells us about the future of AI startups, supervised.news, May 26, 20
8. California-based startup Neeva to shut its consumer search product, yourstory.com, May 22, 20
9. Snowflake acquires Neeva for AI search boost | VentureBeat, Venturebeat, 2023-05-24
10. Neeva IPO Timeline and Financing Details - Forge, forgeglobal.com
13. snow-20241031, sec.gov
14. Google court filing reveals new business details of DuckDuckGo and Neeva | TechCrunch, TechCrunch, 2024-02-23

How this case file was put together

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