Databricks Seeks $5 Billion Funding at $55 Billion Valuation
date
Nov 28, 2024
damn
language
en
status
Published
type
News
image
https://www.ai-damn.com/1732761131318-202304171408579498_3.jpg
slug
databricks-seeks-5-billion-funding-at-55-billion-valuation-1732761150725
tags
Databricks
funding
IPO
data analytics
Apache Spark
summary
Databricks, a leading data analytics company, is planning to raise at least $5 billion in a funding round that would value the company at $55 billion. This funding will enable employees to cash out some shares and follows a successful Series I funding earlier this year.
Databricks Plans Major Fundraising Round
According to recent reports, Databricks, a prominent data analytics company, is preparing to raise a minimum of $5 billion in a new funding round, aiming for a valuation of $55 billion. The proceeds from this funding will provide an opportunity for the company's employees to cash out a portion of their shares.
Founded eleven years ago, Databricks initially focused on commercializing the powerful data processing framework Apache Spark. Over the years, it has grown into one of the leading cloud data platforms, providing advanced analytics, big data management, and artificial intelligence capabilities to numerous large enterprises.
Previous Funding and Growth
Databricks has been viewed as a company poised for a significant initial public offering (IPO), especially following the record-breaking IPO of its competitor Snowflake, which became the largest software IPO ever in September 2020. However, Databricks has opted to pursue funding through the private market instead. In September 2023, the company successfully raised $500 million in a Series I funding round led by Nvidia and T. Rowe Price, reaching a valuation of $43 billion. This funding round brought its total funding raised to $4 billion, with notable investors including Andreessen Horowitz, Baillie Gifford, Fidelity Investments, Insight Partners, and Tiger Global.
Despite projecting $2.4 billion in revenue for the current year, Databricks is seeking additional funding to support its growth. Reports indicate that the company is looking to secure between $5 billion and $8 billion through a secondary share sale, which would allow existing shareholders to sell part of their holdings without undergoing an IPO process.
Potential Record-Breaking Funding
If successful, this funding round could establish Databricks as the largest venture capital funding round in history. The current record is held by OpenAI, which raised $6.6 billion last month, achieving a valuation of $157 billion. Additionally, Elon Musk's AI startup xAI raised $6 billion in a Series B funding round earlier this year and completed another $5 billion funding round this month.
Strategic Acquisitions
In addition to its fundraising efforts, Databricks is also leveraging its cash reserves for strategic acquisitions aimed at expanding its data and AI business. In the summer of 2023, the company acquired MosaicML, a developer specializing in AI model generation factories, for $1.3 billion. Earlier in the year, Databricks acquired Tabular, a commercial company based on the open-source Apache Iceberg project, for an estimated $1 billion to $2 billion.
IPO Possibility in the Future
Although Databricks has not yet gone public, an IPO remains a possibility for the future. During a recent event, CEO Ali Ghodsi indicated that if the company decides to go public, it would not occur before mid-next year. This statement suggests that the timeline for an IPO could be contingent on the outcome of the upcoming funding round.
Key Points
- Databricks plans to refinance $5 billion at a $55 billion valuation, allowing employees to cash out some shares.
- The company has raised a total of $4 billion and is still seeking further funding support.
- The CEO indicated that if an IPO occurs, it could happen as early as mid-next year.