Databricks reaches a value of $62 billion in new financing round

(Bloomberg) — Databricks Inc. is raising $10 billion in new funding, a massive cash injection that will boost the software maker’s value to $62 billion.

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The startup, which is among the highest valued closely held companies in the world, “intends to invest this capital in new AI products, acquisitions and a significant expansion of its international go-to-market activities,” it said in a statement released Tuesday. The capital will also be used to purchase shares from current and former employees.

The financing was led by Thrive Capital, with participation from firms including Andreessen Horowitz and DST Global. “These guys are execution machines. They are ready to become a publicly traded company,” Thrive Capital partner Vince Hankes said in an interview. “Raising some capital and providing liquidity to employees takes some of that pressure off.”

For the fiscal year ending January 2025, Databricks expects annual revenue to exceed $3 billion. Revenue rose more than 60% in the most recent quarter that ended in October, a rapid pace of growth at a time when many software makers are struggling to grow.

“To sustain this growth trajectory, we need to expand Databricks’ go-to-market operations and technical talent,” Chief Executive Officer Ali Ghodsi said in an interview. As for possible acquisitions, Ghodsi said he is looking for technology and talent from AI-focused startups.

“There are a lot of smart people with great ideas, but maybe monetization didn’t work out the way they planned,” Ghodsi said in an interview.

Databricks makes software for collecting, analyzing, and building artificial intelligence apps with complicated data from diverse sources. Key competitors are generally considered to be Snowflake Inc. and services provided by cloud infrastructure providers such as Microsoft Corp.’s Fabric. be offered.

Investors have long waited for Databricks to go public, but the companies’ ability to raise large sums in private markets has allowed them to wait. “Theoretically, we would go public next year at the earliest,” Ghodsi said. “But that gives us a certain flexibility to already offer our employees liquidity options.”

The company’s product that most directly competes with Snowflake, Databricks SQL, reached $600 million in revenue with annual growth of over 150%, the company said. More than 500 customers are on track to spend more than $1 million a year on Databricks’ platform, the company said.

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