Databricks wanted to raise $1B, investors wanted $15B — it settled on $5B at $190B valuation
AI and big-data company Databricks closed a new $5 billion funding round at a $190 billion valuation, far more interest than the $1 billion it originally intended to raise.
Databricks, the AI and cloud data company, announced on Thursday that it closed a new $5 billion funding round, pushing its valuation to $190 billion. CEO and co-founder Ali Ghodsi told TechCrunch the company had originally planned to raise just $1 billion.
A leaked report triggered a wave of investor interest
Things changed after The Information published a report in June about Databricks pursuing a major fundraise, right in the middle of the company's annual conference. Ghodsi said his phone was flooded with calls from investors following the report, with interest from a select group of investors reaching as much as $15 billion.
To avoid upsetting long-term backers, Databricks decided to issue additional shares. In July, the company had already announced closing a round at a $188 billion valuation without disclosing the amount raised at the time. On Thursday, it revealed the round totaled $5 billion, with the valuation rising to $190 billion. The round was led by Coatue, with participation from Blackstone, MGX, several T. Rowe Price-affiliated accounts, and new investor Sixth Street Growth, founded by former Goldman Sachs chief investment officer Alan Waxman. About two dozen VCs took part overall.
Strong financial performance and ongoing acquisitions
Ghodsi said Databricks has reached $7 billion in annualized run-rate revenue, growing 80% and cash-flow positive. Its core cloud data warehouse product accounts for $1.5 billion of that revenue and continues growing 100% year-over-year. The company's AI products are also gaining traction — its database for agents, Lakebase, has already reached a $100 million revenue run-rate, while its AI analysis tool, Genie, is described as highly popular.
Ghodsi explained the additional capital is needed to cover costly multi-billion dollar cloud commitments with the major hyperscalers, fund AI research, and continue acquisitions — the company recently acquired Electric, Panther, and other startups. Databricks has raised $20 billion over the past 20 months. Ghodsi said the company still intends to go public eventually, but for now prefers to keep investing in AI away from public market scrutiny.
