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Databricks Secures $10 Billion Funding in One of Largest VC Rounds, Valued at $62 Billion

Dec 17, 2024, 10:12 PM

Databricks Inc., a data and AI platform company, has raised $10 billion in a Series J funding round, valuing the company at $62 billion. This capital infusion marks one of the largest venture capital raises on record. The investment was led by Thrive Capital and included participation from investors such as Andreessen Horowitz (a16z), GIC, Wellington Management, AMD, Insight Partners, LuminArx Capital Management, Lightspeed Venture Partners, ICONIQ Growth, and Battery Ventures. The company, co-founded and led by CEO Ali Ghodsi, plans to use the funds to accelerate growth, expand its AI and data analytics capabilities, and potentially pursue strategic acquisitions. Databricks reported a revenue run rate of $3 billion for the fourth quarter ending January 31, with revenue growth exceeding 60% year-over-year and accelerating. The company also boasts 80% gross margins and serves over 500 customers generating more than $1 million in annual revenue. Additionally, Databricks' data warehouse product has achieved a $600 million run rate, growing over 150% year-over-year. The funding round was nearly twice oversubscribed, and the company plans to raise an additional $4.5 billion in debt, including a $2.5 billion term loan. Despite the substantial funding and market momentum, Ghodsi said the company is delaying its IPO plans, stating, "It's dumb to IPO this year." He cited the current peak in the AI market and believes waiting until at least 2025 would be more prudent. Databricks aims to achieve positive free cash flow and continues to invest heavily in AI innovations. The funding underscores the significant investor appetite for AI-focused startups, as Databricks solidifies its position as a leader in the data analytics and AI industry.