Data analytics and artificial intelligence company Databricks Inc. is reportedly in talks to raise $5 billion in new funding on a $134 billion valuation.
The new funding, if it should happen The Information reported today, would come after Databricks previously raised funding on a $100 billion valuation in August.
The valuation of the round is roughly 32 times the company’s expected sales of $4.1 billion next year, according to Reuters. It comes at a time when enterprise demand for Databricks’ platform continues to grow as organizations expand their use of generative AI, machine learning and real-time analytics.
Founded in 2013, Databricks offers cloud-based data and artificial intelligence software that gives organizations a unified platform for data engineering, analytics and machine learning. The company’s core platform is designed to replace fragmented data stacks with a single environment where data teams can work from raw ingestion through to advanced analytics.
Databricks’ “lakehouse” architecture combines the low-cost storage of data lakes with the performance and management features of traditional data warehouses. The approach allows organizations to store structured and unstructured data in one place while supporting SQL analytics, real-time streaming and large-scale batch processing.
Besides analytics, Databricks also offers a platform for enterprise AI and machine learning, with tools that support full lifecycle AI development, including feature engineering, model training, evaluation and deployment.
As noted when Databricks previously raised funding in August, the company has been locked in a duel with rival Snowflake Inc. for supremacy in AI development, but unlike Snowflake, it has resisted pressure to go public.
If it did eventually go public, the offering would be likely well-received, as long as the current argued AI-driven boom in equity markets doesn’t bust. Best known for its analytics, Databricks’ topline growth is being driven by organizations expanding their use of generative AI and machine learning.
Though AI may be the key driver of growth at Databricks, it’s also putting pressure on its margins, with the company reportedly having told investors its gross margin is falling faster than anticipated, to 74% compared with an earlier plan for 77%, due to increasing usage of its AI products.
Databricks has more than 20,000 customers. Notable Databricks customers include OpenAI Group PBC, Block Inc., Shell plc, Siemens AG, Toyota Motor Corp., AT&T Inc., Walgreens Boots Alliance Inc. and Rivian Automotive Inc..
Coming into the potential new funding, Databricks has previously raised about $15.7 billion over 15 rounds, according to data from Tracxn. Investors in the company include Andreessen Horowitz, Insight Partners LP, MGX Capital, Thrive Capital Management, WCM Investment Management, The Blackstone Group Inc., Apollo Global Management Inc., Blue Owl Capital Inc., JPMorgan Chase & Co., Barclays plc, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley.
Photo: Robert Hof/ News
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