Ali Ghodsi, co-founder and CEO of Databricks Inc., spoke during an interview with Bloomberg Technology TV in San Francisco on October 22, 2019.
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One of the world’s most valuable private technology companies is raising billions of dollars in cash and is in no rush to go public, sources told CNBC.
San Francisco-based Databricks will raise at least another $5 billion in its latest funding round, but could raise as much as $8 billion now that the round is ongoing, according to multiple sources who spoke on condition of anonymity. The latest round of financing will value the company at $55 billion, potentially surpassing OpenAI’s largest funding round this year.
The latest round of funding is aimed at helping Databricks employees sell stock, sources said. Reducing pressure on employees to cash out also reduces the need for liquidity events such as IPOs. One source said the funding round makes Databricks’ much-anticipated public debut less urgent. But it could still happen in the second half of next year.
Databricks, founded in 2013, sells software that helps companies organize data and build their own generative artificial intelligence products. It uses machine learning to help customers from AT&T to Walgreens parse and understand large amounts of data.
The equity round may be the largest in a banner year for artificial intelligence funding. According to CB Insights, one-third of all venture capital investment this year has gone to artificial intelligence startups. OpenAI holds the 2024 record, having raised $6.6 billion at a $157 valuation in October.
Databricks last raised $500 million and was valued at $43 billion. its supporters are NVIDIA, capital oneAndreessen Horowitz, Baillie Gifford, Fidelity, Insight Partners, Tiger Global, and others.
Information first report Databricks is raising money.
The company has capitalized on the momentum of artificial intelligence. This summer, it acquired MosaicML, a $1.3 billion software startup focused on large-scale language models that can produce natural-sounding text. Databricks told investors earlier this year that annualized revenue would reach $2.4 billion by mid-2024.
The company’s decision to stay private comes as software stocks struggle to shake off rising interest rates. Shares of rival Snowflake are down 13% this year. While other software IPO candidates like Stripe have seen their valuations slashed, Databricks has grown in value while growing its employee base.
Chief Executive Ali Ghodsi said at a conference last week that he was optimizing for Databricks’ success over the next year or two, rather than optimizing for an IPO.
“If we were to go, it would be the middle of next year at the earliest, or something like that,” Ghodsi said at Newcomer’s Brain Valley artificial intelligence conference. “So, you know, it could happen next year.”
A Databricks spokesman declined to comment.
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