Ali Ghodsi, co-founder and chief executive officer of Databricks Inc., spoke in a television interview with Bloomberg Technology in San Francisco on October 22, 2019.
David Paul Morris | Bloomberg | Getty Images
One of the world’s most valuable privately held technology companies is raising billions more in cash and is in no rush to go public, people told CNBC.
San Francisco-based Databricks has raised at least another $5 billion in its latest funding round, but talks say it could raise as much as $8 billion considering the round is ongoing. This was disclosed by multiple people on condition of anonymity as it was not made public. The latest raise values the company at $55 billion, potentially surpassing OpenAI’s largest funding round this year.
According to people familiar with the matter, the latest funding was used to help Databricks employees sell their shares. Reducing pressure from employees to cash out also reduces the need for liquidity events such as IPOs. One person said the latest funding round takes away the urgency for Databricks’ long-awaited public debut. But that could happen late next year.
Databricks was founded in 2013 and sells software that helps companies organize their data and build their own generative AI products. We use machine learning to help clients from AT&T to Walgreens parse and understand large amounts of data.
The equity round could be the largest in a banner year for artificial intelligence funding. According to CB Insights, one-third of venture funding this year went to AI startups. OpenAI holds the record in 2024, having raised $6.6 billion in October at a valuation of $157.
Databricks last raised $500 million at a valuation of $43 billion. Backed by Nvidia, Capital One, Andreessen Horowitz, Baillie Gifford, Fidelity, Insight Partners, Tiger Global, and more.
The Information first reported that Databricks is raising money.
The company is capitalizing on the momentum of artificial intelligence. This summer, the company acquired MosaicML, a $1.3 billion software startup focused on large-scale language models that can churn out natural-sounding text. Databrix told investors earlier this year that it would reach $2.4 billion in annual revenue by mid-2024.
The company’s decision to remain private comes as software stocks struggle to break out of a rut brought on by rising interest rates. Rival Snowflake’s stock has fallen 13% this year. While software IPO candidates like Stripe have seen their valuations slashed, Databricks has increased in value while expanding its employee base.
CEO Ali Ghodsi said at a conference last week that instead of optimizing for an IPO, he is optimizing for Databricks’ success over the next 10 to 20 years.
“If we were to do it, it would probably be in the middle of next year or so at the earliest,” Godi said at the Newcomers Ceremonial Valley AI Conference. “So that could happen again next year.”
A spokesperson for Databricks declined to comment.
