Databricks builds war chest with $134 billion valuation in latest funding round
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Dec 16 : Databricks said on Tuesday that it has raised more than $4 billion at a valuation of $134 billion, the latest example of investors betting big on companies benefiting from the broader adoption of artificial intelligence.
The Series L funding round for Databricks, which provides a software platform that helps firms manage large amounts of data and build their own AI models, came less than six months after its previous round at a valuation of $100 billion.
It has given the San Francisco-based company a war chest to maintain investment momentum against competitors.
"It's a race, and everybody's investing," Databricks CEO Ali Ghodsi said in an interview.
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"We don't want to fall behind. I think by investing a lot and raising this kind of capital in the past, we've been able to actually accelerate our growth."
REVENUE SURGING
Databricks surpassed a $4.8 billion revenue run rate in the third quarter, up more than 55 per cent from a year earlier.
Revenue from its AI products and data warehousing businesses each exceeded a $1 billion run rate, all while delivering positive free cash flow over the last 12 months, it added.
The company plans to use the funds for research and development, to expand its go-to-market teams and for talent retention, which includes providing liquidity to employees through secondary share sales.
The funding round was led by Insight Partners, Fidelity Management & Research Company and J.P. Morgan Asset Management. Andreessen Horowitz, BlackRock and Blackstone also participated.
The company "continues to pair strong financial performance with real customer results, setting the standard for how AI creates value for businesses," said John Wolff, managing director at Insight Partners.
While the company is not ruling out an IPO in 2026, Ghodsi cited the 2022 market meltdown and layoffs as a scenario he hopes to avoid as a public company.
DATA INTELLIGENCE APPS
Databricks has positioned itself as a neutral and secure option for businesses, emphasizing that its governance tools allow clients to work with sensitive data without the data leaving their secure cloud environment.
Ghodsi outlined a strategy focused on building "data intelligence apps".
This includes investing in a database tailored for AI agents, and "Agentbricks" for embedding intelligence into software. That will allow customers to use a variety of underlying AI models from providers like OpenAI, Anthropic and Google, as well as open-source options.
Ghodsi said he sees a "commoditization happening with LLMs," which increases the value of Databricks' platform which helps businesses customize and deploy them securely.
The company caters to more than 20,000 customers globally, including large corporations such as Shell, Adobe and the NBA.
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