Databricks, a leading AI and data analytics platform, has raised $10 billion in one of the largest venture capital funding rounds in history.
The oversubscribed round was led by Thrive Capital, the investment firm founded by Joshua Kushner, and included participation from investors such as Andreessen Horowitz, DST Global, GIC, Insight Partners, and WCM Investment Management.
Existing backer Ontario Teachers’ Pension Plan and new participants like ICONIQ Growth, MGX, Sands Capital, and Wellington Management also contributed to the funding.
Databricks expects to achieve positive free cash flow for the first time in the quarter ending January 31, alongside reaching a $3 billion revenue run rate by January. Projections for the next fiscal year suggest revenues will climb to $3.8 billion.
The funding will be primarily allocated for employee stock buyouts, hiring top AI talent, investing in AI product development, and potential acquisitions of startups, said Ali Ghodsi, co-founder and CEO of Databricks. Ghodsi highlighted the company’s disciplined approach to growth, including optimizing operational costs and offshoring jobs, as key factors behind its financial success.
While Databricks is widely seen as a strong candidate for an initial public offering (IPO), this funding round provides flexibility, allowing the company to delay going public. “It’s not if, but when,” Ghodsi stated, emphasizing that employee liquidity remains a top priority for management.
AI-Driven Market Demand
The latest funding round surpasses the $6.6 billion raised by OpenAI in October, reflecting surging investor interest in AI-driven companies. Databricks serves 10,000 customers, including major players like Block, Comcast, Rivian, and Shell, enabling them to analyze and leverage data effectively.
Databricks competes with Snowflake, which currently holds a market capitalization of $57 billion. Thrive Capital partner Vince Hankes described Databricks as an “iconic private tech company” with the potential to become a platform powerhouse in the AI era, Reuters news report said.
Generative AI adoption and the need for enterprise-grade data solutions are pivotal to Databricks’ next growth phase. Insight Partners’ George Mathew noted, “The exponential demand for data management, analytics, and AI systems underpins the seminal role Databricks plays in unlocking the full potential of data.”
