Databricks is engaged in discussions to achieve a valuation of up to $175 billion.
Databricks is in discussions to secure a new funding round valued between $165 billion and $175 billion, as reported by The Information on Monday, just four months after achieving a valuation of $134 billion. This new round could commence as early as next month and would reflect a 23% to 31% increase from the previous valuation.
The February round was substantial, totaling around $5 billion, which included $2 billion in debt, making it one of the largest private fundraising events in the AI sector. Databricks aims to raise additional funds before utilizing the capital from the previous round, a strategy commonly employed by AI infrastructure firms looking to solidify their valuations prior to going public.
Regarding performance, Databricks announced in February that it surpassed an annualized revenue run rate of $5.4 billion, a 65% year-on-year increase. The company offers a data lakehouse platform that integrates data warehousing and lake capabilities, which enterprises utilize to handle and analyze the large datasets necessary for AI models.
At a valuation of $175 billion, Databricks would be trading at approximately 32 times its revenue run rate, which, while high by traditional software standards, aligns with the valuation multiples seen in private markets for AI-related infrastructure companies.
CEO Ali Ghodsi has confidentially communicated to investors that an IPO is on the horizon, potentially as soon as next year. A pre-IPO round at the new valuation would establish a baseline for a public offering.
The market is already competitive, with OpenAI confidentially filing for an IPO this week, Anthropic having filed last week, and other listings on the horizon. If Databricks goes public in 2027, it will do so in a market that will have experienced the largest AI IPOs to date.
Raising funds at a 30% increase just four months after a $5 billion round indicates a focus on establishing a high private-market valuation rather than a need for cash. However, there is a risk that enthusiasm in private markets might not carry over to public market evaluations. Discussions are still in the early stages, and the round has not yet closed, meaning the valuation range may fluctuate. Databricks has not yet commented on these developments.
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Databricks is engaged in discussions to achieve a valuation of up to $175 billion.
Databricks is in discussions to raise funds at a valuation of $165-175 billion, just four months following a $5 billion funding round at a $134 billion valuation. The CEO indicates an IPO is anticipated next year. These discussions are still in the preliminary stages and the funding round has not yet been finalized.