Databricks Raises Money - 55 Billion Dollar Valuation
... to IPO or not IPO ...
Follow the money, isn’t that what the wise old sages always say? There is indeed a big pile o’ money at the end of the rainbow, and that rainbow is Databricks.
I’m not sure if there has been any doubt, but Databricks is the AI and Data behemoth that simply can’t be defeated. It’s pretty obvious that a company in the “niche” of data, that has been able to become a household tech name, like Databricks, has pretty much made it to the pinnacle of the known world.
To prove it, Databricks just raised a massive amount of funding.
Recently, Databricks reportedly raised 5 billion in cash money, leading to a new valuation of a whopping 55 billion.
The obvious next question that has been rattling around in everyone’s mind, and probably all those soon-to-be millionaire employees of Databricks, is, when oh when is Databricks going to IPO and go public?
Well, apparently not right now!
Let’s put this in perspective, shall we? Let’s compare Databricks latest numbers to OpenAI, the hottest slice of bread on the block this year.
OpenAI in 2024 - raising $6.6 billion in October at a $157 billion valuation.
Databricks in 2024 - raising $5 billion at $55 billion.
I mean the fact the two are anywhere in the same vicinity is a feat by Databricks that should not be ignored. It makes you wonder what kind of money those two companies (Databricks and OpenAI) are making.
I mean who knows if these numbers are correct, the fickle internet is what it is. But, it’s looking pretty good for Databricks if you ask me. The question we don’t know is “How much are they spending to get that revenue.”
The word on the street is that Databricks is making some 1.6 billion, and OpenAI is around $3.6 billion. That’s not too far apart and look at the valuations. Interesting.
Wondering why Databricks decided to raise funds and not IPO? The press is saying …
“The latest funding is designed to help Databricks employees sell shares, one of the people said. Reducing pressure from employees to cash out also reduces the need for a liquidity event such as an IPO.” - news
That brings up an interesting topic: Databricks employees. Not sure if you are aware, but there are some smart folk they have hired over there and they’ve been slowly building that A+ team over the years.
Having interacted with them (Databricks employees) on various fronts over the years, I can say, it’s painfully obvious to me they only hire the best and brightest for the most part.
I can think of only one idiot off the top of my head that I had to deal with there (I’m not bitter or anything).
All you have to do is use their product to be parted from the theory that Databricks employees are nothing special. They’ve built a best-in-class Data and AI Platform that is light years ahead of anyone else. It’s the employees that did that.
So apparently this funding round was to let some of the employees get rich, as they should, and not leave for greener pastures.
I mean if that silly site Glassdoor can be trusted at all anymore, seems like Databricks is loved by it’s employees, which is pretty good for a company that size.
Funny enough, a few months ago on Reddit you could find stuff like this. “Why hasn’t Databricks IPO’s?” → Employee → “I wish they would.” Now, whomp whomp, they purpodedly raised a ton of money to help some employees hit the jackpot.
Make’s you wonder if Databricks will do something else with all that money. They have been known to drop some coin acquiring different businesses.
“In the summer of 2023, the company spent $1.3 billion to acquire MosaicML, which developed an AI factory that creates GenAI models. Earlier this year, it shelled out between $1 billion and $2 billion to acquire Tabular, the commercial venture behind the open source Apache Iceberg project.” - news
Either way, it seems like Databricks continues to execute in all aspects at high levels. It shows a kind of “bravado” to continue to not IPO when everyone, including employees, continues to expect and and call for it.