Databricks said it has raised $10 billion in an extraordinary funding round that it said will help provide “liquidity for current and former employees.”
That sounds strikingly like “help it pay staff” but Databricks claimed it was in rude good health, with revenue run rate set to hit $3 billion by January.
"This quarter marks the first time the company is expected to achieve positive free cash flow," it added in a press release on the funding news.
The line in a press release today appears to refer to Databricks’ ability to pay for stock sales by staffers whilst continuing its bullish expansion.
It also intends to invest this capital towards new AI products, acquisitions, and significant global go to market expansion, it said on December 17.
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Despite nearly doubling revenues over the past 15 months, Databricks appears to be burning cash; the “non-dilutive” Series J round, led by Thrive Capital, comes just a year after the company raised $500 million.
(The round values Databricks at $62 billion; up from $43 billion in September 2023, when it told The Stack that revenues were $1.5 billion.)
Databricks said today that it was raising $10 billion with $8.6 billion raised to date. The latter is believed to be via a secondary share sale “which would allow early investors and employees to sell their stakes to new investors” – the other tranche appears to be a debt raised intended to “help it offset tax burdens associated with stock sales from staffers.”
It has used plenty of its earlier warchest to fund acquisitions, including Rubicon in June 2023 (AI storage infrastructure); Mosaic in June 2023 (an AI model builder) and Tabular in June 2024 (an Apache Iceberg specialist.)
The company has grown over 60% yearly in the UK alone for the past three years, executives earlier said, naming UK customers like GSK, Heathrow, Rolls Royce, Shell, and Virgin Atlantic among others and this year opened a new 29,885-square-foot in north London.
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San Francisco-headquartered Databricks was founded by the creators of Apache Spark; a data analytics engine. Its “Databricks Intelligence Platform” PaaS is built on its “Lakehouse” architecture and underpinned by Apache Spark, as well as OSS Delta Lake, MLflow and Unity Catalog.
It offers a broad suite of data tools which critics say have traditionally been engineering-intensive and not always easy to consume, with a fragmented if powerful suite of capabilities increasingly augmented through acquisitions. Since late 2023, however, it has talked about its proposition as centred around a single “Databricks Intelligence Platform.”
That’s a one-stop hub for data engineering, data governance, data science, and AI/ML; building on its $1.3 billion Mosaic AI buyout in 2023. It is delivered as a PaaS on top of a cloud provider. All customer data can be stored on AWS/Azure/GCP with compute provisioned from cloud VMs.
“We were substantially oversubscribed with this round… These are still the early days of AI. We are positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers and our team is committed to helping companies across every industry build data intelligence,” said Databricks CEO Ali Ghodsi in a canned statement.
“We would not be where we are today without our employees, and we want to compensate them for all of their hard work” he added today.
The astonishingly large raise did not have a shortage of Big Name backers: It was co-led by Andreessen Horowitz, DST Global, GIC, Insight Partners and WCM Investment Management. Other significant participants include existing investor Ontario Teachers’ Pension Plan and new investors ICONIQ Growth, MGX, Sands Capital and Wellington Management.
