You probably haven’t read or heard much about it, but Databricks has become another of the great covers in the artificial intelligence segment. The company has just announced an investment round of 10 billion dollars, the largest in all of 2024. In fact, it leaves behind colossal rounds such as those of OpenAI or xAI, and in all cases the engine of these rounds is the same: the artificial intelligence.
What Databricks does. The company was founded in 2013 as a spinoff at the University of California at Berkeley whose leaders worked on Apache Spark. They currently provide a cloud platform that allows companies to develop and manage solutions that combine big data and artificial intelligence. Its platform is capable of managing massive amounts of data quickly to process it and, among other things, offer analysis of all kinds on that data.
10,000 million dollars up for grabs. Last week, the company announced this new round of financing (Series J) with which it has managed to raise 10 billion dollars. That brings its valuation to $62 billion (it was previously $43,000) and Thrive Capital, Andreessen Horowitz, DST Global, GIC and Iconiq Growth have participated in the round.
From IPO, nothing. This new round and valuation make Databricks one of the most important private companies in the world. The company has raised “non-dilutive” financing without issuing new shares or reducing the participation of existing investors. The company’s CEO, Ali Ghodsi, explained that they were in no rush to go public: “this year has been an election year and we wanted to achieve stability.” Experts talk about a takeover bid in 2025 or perhaps 2026, something that participants in this and previous investment rounds will undoubtedly also want: that will allow them to reap benefits.
(A lot) Money for your employees. Much of the money from the round will be used to Buy back shares from employees, who will then be able to sell them, obtaining liquidity and a succulent profit without the tax burden being especially notable. Postponing a potential public offering of shares seems like a wise bet: Databricks does not stop growing and its valuation can make this IPO even more striking.
Growing like foam. As indicated in Axios, Databricks is growing 60% compared to last year in revenue and they expect to generate positive cash flow in the fourth quarter of the year, something especially notable because it would be the first time they have achieved this. That means Databricks would manage to have cash on hand after covering all of its operating and investment expenses, which is a sign of good financial health.
In WorldOfSoftware | The cover of AI is Meta. He has been betting on it for more than a decade and he already has much more than LLaMa
