Databricks in Talks to Raise at Above $165 Billion Valuation
The Takeaway
- Databricks eyes new funding round at $165 billion to $175 billion valuation.
- Databricks achieved $5.4 billion revenue run rate, up 65% year-over-year.
- Databricks delays IPO, CEO privately eyes public offering as soon as next year.
Databricks, a provider of database management software, has discussed raising more money in a funding round that could kick off within the next month, according to multiple people with direct knowledge of the conversations. Databricks has indicated to investors the new round could lift its valuation to between $165 billion and $175 billion.
That would mark a jump from its $134 billion valuation, including the money raised, in a round raised late last year. The 13-year-old company has repeatedly pushed off going public, instead opting to raise successive rounds of private capital and arranging for sales of existing shares. The final terms have not been set on the new round, and it’s not clear whether the valuation would include the new funding.
A new funding round could give Databricks further rope to avoid going public. Last week, co-founder and CEO Ali Ghodsi said on Bloomberg Television that 2026 is “a terrible year” to go public because of the other larger companies going public like SpaceX. However, privately, he’s indicated to investors that the company is still IPO bound, potentially as soon as next year.
On Monday, OpenAI said it had filed paperwork for a public offering, on the heels of a similar filing from Anthropic. Together, they could try to raise hundreds of billions.
Databricks has continued to report strong growth as it sees demand for its AI products. In February it said it had surpassed $5.4 billion in revenue run rate, up 65% from the prior year, and said it had generated a run rate of more than $1.4 billion from AI. It had positive free cash flow over the prior year, it said. At the time, Ghodsi said the company’s board has pushed it to raise more capital out of concerns of a possible AI slump.
Public market investors have been skeptical that older enterprise software companies will be able to stave off rival products from newer AI companies. But some have recovered lately. Databricks rival Snowflake shares have rallied 10% this year though they’re still off from their 2021 high.
It could not be learned whether the bulk of capital from the new Databricks fundraising would be to add more cash to its balance sheet or to buy out existing shareholders in a secondary offering. Databricks’ existing investors include Andreessen Horowitz, NEA and Battery Ventures. It has raised almost $30 billion in capital, according to PitchBook Data.