Redis Labs CEO Ofer Bengal once had a sideline in designing children’s toys, but he’s not playing around at the open source caching engine and database company he co-founded; this week closing a $100 million Series F funding round that took the Mountain View, California-headquartered firm to unicorn status for the first time.
Redis Labs, which names over 7,500 customers, including Dell, MasterCard, and Microsoft, started life as the provider of an open source caching engine designed to reduce the time applications need to access data stored in their main database.
(Its speed is genuinely impressive: Redis on Flash and Intel NVMe delivers three million operations per second; full ACID [database properties that guarantee validity] transactions on an EMC VMAX all flash storage array hit 660K ops/sec on the standard 1:1 read/write use case with 100B item_size; 640K op/sec for write-intensive use).
It has since evolved to the extent at which it can be used as a primary database too, with Redis Labs offering a range of premium features, including RedisAI for serving Artificial Intelligence (AI) models to the applications that are using them.
(Think all the data being collected by an autonomous vehicle that needs to be served to-from an AI model that ultimately informs the application; i.e. tells the vehicle to stop, start, or swerve at a given moment. This is served via a Redis module, or shared library loaded by the Redis server during runtime, which allows it direct access to the data).
Redis Labs CEO: “In Order to Grow, Unfortunately, You Need to Spend Money…”
Redis itself remains hugely popular with developers (“most loved” in Stack Overflow’s survey for years running) with approximately six million Redis Docker containers launched daily: “More than MongoDB, Elastic and MySQL combined”, claims CEO Bengal proudly: “There is no other database, SQL or NoSQL that comes even close.”
The Series F round was co-led by Bain Capital Ventures and TCV, with participation by the company’s existing investors Francisco Partners, Goldman Sachs Growth, Viola Ventures, and Dell Technologies Capital. Redis Labs has now raised over $246 million.
So why the raise? Redis Labs — which has faced all the challenges of companies built on open source, from companies deciding to self-serve, to hyperscale cloud providers rolling out their own managed services — wanted to give growth a boost in a tough climate (as a privately held company it’s not disclosing exact figures, but CEO Bengal says it is close to $100 million revenue run rate this year, with growth sitting just under initial 2020 expectations of 50%, or at around 30%-40%,
As the former Israeli aerospace engineer and entrepreneur puts it: “We decided long ago that growth is what we are after. And in order to grow, unfortunately, you have to to earn money, you know, to spend money and to burn money.
“A significant amount [from previous raises] is still on hand, but we thought that we should strengthen our financial situation even further and luckily enough we were blessed with good investors and good momentum.”
Redis: Remind Me…
For those in need of a refresher of where Redis Labs sits, for many applications there exists a database and a cache. Each time data is needed from the database, the application has to do, as Redis itself puts it, “a short choreographed dance” of four steps.
- Ask the cache for the data.
- If the cache doesn’t have the data, ask for the data from the database.
- Take that data from the database and populate it into the cache.
- Get a reply from the cache
This little four-step shuffle adds real complications in terms of application logic, connections between multiple services, and multiple potential points of failure, but is needed to make up for slow-reacting databases. And Redis Labs — which offers a free, open source iteration of its software, premium tier software, and a fully managed, low-touch, cloud-based service — is growing in large part by persuading businesses to start using it as a database as well as the in-memory caching service
The up-sell, in brief, as per website blurb: “Operationally, any time you can remove an entire layer from your stack, things are vastly simplified. You no longer have to worry about the database and cache both staying up, and you also don’t need to worry about two sets of upgrades, security protocols, resources, or underlying infrastructures.”
As Instaclustr puts it: “Redis is open source, robust, has an elegant interface and provides a superset of the features provided by competitors who offer at best similar performance in a far narrower set of use cases. Finally, Redis has great disk persistence and clustering capabilities which make it able to be scaled and deployed in high availability scenarios where warm restarts are required to protect core infrastructure.”
No Need to Start with the Database Experience…
As CEO Bengal tells Computer Business Review: “We do not necessarily insist that the customer starts the journey with the database experience. It’s fine for us that the customer starts as a caching layer customer. And then over time, we show them how much more they can do with Redis as a front-end database and as the primary database; they then expand to more and more use cases.”
He’s keen to play down the competition on the database side, but Redis Labs’ well-documented frustations with AWS for its supposed open source strip mining (a reputation AWS has been keen to combat in recent years with more emphatic open source engagement) are never far from the surface.
He notes: “We have really tough competition because of the dominance of AWS; their captive customers… many times customers will compromise for for a less good product just to use the money they committed to AWS…”
As for Redis’ license changes, which aimed to frustrate such actions: “The reaction has been very good. And we are seeing a lot of momentum with cloud providers such as Google and Azure… some of it is driven by by this license change because they realized that some of the benefits of Redis, they better get directly from us than trying to take the open source and build something on their own.
“We’ll need to see if AWS follow suit. But at the moment it’s with Azure and with Google and with both we have fantastic partnerships in place. Google is now on its third quarter. Revenues are growing very, very nicely; over 300% in just two quarters. And as we announced two months ago, Redis Enterprise, which is our commercial product, will become the top tier in the Microsoft Redis service, which is called Azure Cache for Redis. And this is something that they built on their own; we provided the software and they built the entire service layer clustering and everything else by their own on their own. That’s amazing for us.”
Bengal’s own approach to product development, from prototyping through to production, is reflected in an unusual business he’s pursued in the past: designing and licensing toys to companies like Hasbro. As he tells Computer Business Review, he even toyed with the idea of launching a company that would be an vertically integrated toy design and manufacturing company, but was talked back into tech instead; building then taking public RiT Technologies in 1997.
His interest in emerging tech remains and Redis Labs has worked closely with Intel on its unusual memory technology, Optane, based on 3D XPoint materials. The two seem like a natural fit. What are his thoughts on uptake?
“We worked with Intel during the development of Optane hand-in-hand; they were POCing Optane with Redis, so we are fully compatible. I think uptake is a bit slower than anticipated because the whole thing with Optane was ‘we will give you something which is as good a memory as DRAM, with a lower price. I think that the problem is the price at the moment is not low enough. If it were low enough, it would be a game changer; but we do have customers using it…”
Banner image shows Redis Labs CEO and co-founder Ofer Bengal, right, with CTO and fellow co-founder Yiftach Shoolman.