Per an announcement to the vim developers, Diego Viola who's interested in Neovim explains it as "to refactor and modernize the [vim] codebase." This was already criticized by vim's Bram Moolenaar who was quick to say, "It's going to be an awful lot of work, with the result that not all systems will be supported, new bugs introduced and what's the gain for the end user exactly? Total refactoring is not a solution. It's much better to improve what we have. Perhaps with some small refactorings specifically aimed at making Vim work better for users."
This new young project is hosted at Neovim.org and its code is offered at GitHub.com. The project was started by Thiago de Arruda.
The expressed reason for this big vim rewrite is that the editor is now 20+ years old and has more than 300,000 lines of C89 code. The goals of Neovim's code come down to simplified maintenance, split work across multiple developers, support new and modern UIs without modifying vim core, and improving the extensibility power with a new plug-in architecture based on co-processes that can be written in any language. Among the first items on the Neovim agenda are moving to a cmake-based build system, dropping legacy system and compiler support, move to libuv for handling platform-specific code, and work on the new plug-in architecture.