You’ve probably never heard of New York’s most valuable startup—and it’s worth $1.2 billion

Out of Silicon Alley’s shadows comes MongoDB.
Out of Silicon Alley’s shadows comes MongoDB.
Image: Reuters/Chip East Pictures of the Year 2003
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This piece has been corrected.

For the digitally savvy, startups founded in New York’s “Silicon Alley” such as Tumblr, Foursquare and Etsy have become household names. But ever heard of MongoDB? The open-source, document database company, backed by high-profile investors like Altimeter Capital and, among others, is worth some $1.2 billion after its latest financing round, in a fillip for New York’s bustling startup scene.

This is the highest valuation ascribed to a Silicon Alley startup, reports Businessweek—even more than the eye-popping $1 billion Yahoo paid for the wildly popular blogging service Tumblr earlier this year.

So what’s all the hype about? Selling databases is by no means a sexy business, which is why you may not have heard of MongoDB. But databases are the lifeblood of corporate IT departments. MongoDB, whose name is derived from the word ‘humongous,’ has been quietly chipping away at database king Oracle’s stranglehold on the sector with an open-source version of its technology. The open-source setup gives enterprise software makers and developers within big corporate IT departments more flexibility to mold the product to their needs.

“The thing we really don’t like about Oracle more than anything is the data model. We think that the [closed] relational data model is good for some use cases, but the [open] document model is actually better for a large number of use cases,” Eliot Horowitz, co-founder and CTO of MongoDB, has said. Because Oracle’s systems are controlled by Oracle, developers aren’t able to change them as quickly as they would like. The faster evolution of MongoDB means that developers themselves are driving companies’ transition to it.

Despite its low profile, MongoDB’s document management technology has been downloaded more than 5 million times. It has roped in 600 corporate customers, including the likes of Goldman Sachs and MetLife, and more than 300 employees.

Correction (October 7, 2013): A quote in this article by Eliot Horowitz, co-founder and CTO of MongoDB, was attributed incorrectly to Ben Horowitz of venture capital firm Andreessen Horowitz. Altimeter Capital was also misspelled. Both errors have been corrected.