Databricks announced plans to raise a mammoth $10 billion at a $62 billion valuation, marking one of the largest private funding events in recent memory.
Its new round arrives amid an active season for AI investment. In October, OpenAI secured $6.5 billion in fresh funding led by Thrive Capital. Thrive is also a key player in the Databricks financing, investing heavily and signaling confidence in the broader market for enterprise AI solutions.
“Databricks, driven by its mission to democratize data and AI, has emerged as the platform of choice,” said Joshua Kushner, CEO of Thrive Capital. “We have witnessed the team’s unrelenting execution, and consider it an honor to be partners with the company for the long term.”
Other participants include well-known backers such as Andreessen Horowitz, DST Global, GIC, Insight Partners, and WCM Investment Management. ICONIQ Growth and MGX also stepped in, adding international depth to the roster.
Ali Ghodsi, Databricks’ co-founder and CEO, made no effort to hide his enthusiasm.
“We were substantially oversubscribed with this round and are super excited to bring on some of the world’s most well-known investors who have a deep conviction in our vision,” he said in a statement.
Adding: “These are still the early days of AI. We are positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers and our team is committed to helping companies across every industry build data intelligence.”
The new funding round will also let employees (current and former) cash in on the growth. This type of secondary sale has become a popular move among large private companies. Stripe and SpaceX have done it and OpenAI took a similar path too. It’s a way to reward the team without having to rush to public markets.
By the end of January, Databricks expects to hit a $3 billion annual revenue run rate and turn free cash flow positive. If it pulls that off, it would be a milestone. Private outfits that bring in that kind of money and manage their expenses well can hold off on an IPO if they choose.
That amount of growth would have been hard to imagine when it launched in 2013 as an academic project. But the appetite for data-driven intelligence has soared since then, especially among Fortune 500 companies trying to remain competitive.
With this funding, Databricks doesn’t have to rush into the spotlight of a public listing. It can take its time. It can keep building. And perhaps most importantly, it can expand its reach with no immediate need to please the quarterly demands of stock analysts.