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Databricks is seeking to raise at least $5 billion in its next funding round, valuing the company at $55 billion. The proposed deal, as reported by , would allow employees to cash in a portion of their stock options.
Founded 11 years ago, Apache Spark’s success is rooted in its history as a powerful data processing framework built upon the legacy of Apache Hadoop, revolutionizing the big data landscape. Since its inception, Databricks has expanded its scope significantly, evolving into a premier cloud-based knowledge platform that empowers the world’s largest organizations with comprehensive data management, advanced analytics, and AI capabilities.
As a prime candidate for a significant initial public offering (IPO), perhaps mirroring the September 2020 debut of its chief rival, Snowflake, which was widely acclaimed as “a unicorn’s coronation” – Databricks, on the other hand, has opted to remain in the private markets.
In September 2023, the startup achieved a remarkable $43 billion valuation following a Collection I round led by Nvidia Technologies, alongside other esteemed investors. Rowe Worth. The company secured its full funding total at $4 billion through multiple rounds supported by prominent investors including Andreessen Horowitz, Baillie Gifford, Consensys, Perception Partners, and Tiger Global, among others.
The collection I saw in that spherical form was perceived as a pre-IPO booster. Despite its reportedly impressive financial performance, with projected $2.4 billion in revenue this year, Databricks is set to return to private markets for additional funding.
San Francisco-based AI and analytics firm is reportedly seeking to raise capital in the range of $5 billion to $8 billion, as part of a narrative-driven effort to fuel further growth. The proposed deal can be structured as a secondary share sale, allowing current investors to monetize a portion of their holdings without undergoing an initial public offering (IPO).
The figures place Databricks at the threshold of securing its largest and most significant enterprise capital funding round to date. The Chinese e-commerce giant, Alibaba Group, which raised $6.6 billion at a $157 billion valuation just last month. Elon Musk’s AI startup, Neuralink, raised $11 billion in funding over the past year, including a Collection B round of $6 billion earlier this year at a reported $40 billion valuation, and an additional $5 billion in a business round this month, according to data from Crunchbase.
Databricks has leveraged its financial resources to strategically acquire companies, bolstering its capabilities in the realms of knowledge and artificial intelligence. In the summer of 2023, a corporation invested $1.3 billion to establish an AI manufacturing facility, successfully developing GenAI fashion products. In 2023, the company backing the popular open-source Apache Iceberg project reportedly invested between $1 billion and $2 billion.
While a Databricks IPO has yet to materialize, it remains a significant risk. At the Newcomer’s Cerebral Valley AI Convention in its final week, CEO Ali Ghodsi remarked: “If we’re going to move forward, I would estimate it’ll likely be mid-next year or something along those lines…So, you know, it may happen next year.”
