Databricks targets steep growth after historic funding round
Databricks has raised $10 billion in venture capital (VC) funding, marking one of the largest investment rounds in tech history.
Founded in 2013, Databricks is built upon the open source Linux Foundation Delta Lake lakehouse system, though its Data Intelligence Platform announced last year marked a shift towards more AI integration following its acquisition of MosaicML.
Just over a decade later, the generative AI-powered data intelligence company is now valued at $62 billion. The company secured funding from Thrive Capital, Andreessen Horowitz, Insight Partners and more.
“We were substantially oversubscribed with this round and are super excited to bring on some of the world’s most well-known investors who have a deep conviction in our vision,” said Ali Ghodsi, Co-Founder and CEO of Databricks.
Reuters reported that Databricks expects to generate $3.8 billion in revenue in the next fiscal year, while the firm said in a statement that it would achieve positive free cash flow this quarter and had seen 60% growth year-on-year, fueled by “unprecedented interest in artificial intelligence.”
This quarter marks the first time the company is expected to achieve positive free cash flow.
To satisfy customer demand, Databricks intends to invest this capital towards new AI products, acquisitions, and significant expansion of its international go-to-market operations.
Databricks success driven by surging AI demand
Databricks said it would use the money to expand international operations — the company recently opened a new regional hub in London — as well as to fund acquisitions. Earlier this year, Databricks acquired Tabular, reportedly for more than $1bn, following a spending spree that included $1.3bn for MosaicML.
But the company also plans to work on developing new AI products, according to Ghodsi.
“We’re building transformative data and AI infrastructure and excited to move aggressively in service of our customers and their success,” he said.
“These are still the early days of AI,” Ghodsi added. “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.”
Beyond investing in AI, Databricks said the money raised would be used to provide liquidity to current and former employees — in other words, to cash out shares.
Building on a big year
Alongside the Tabular acquisition, Databricks has had a busy year. It posted that aforementioned 60% year-on-year growth and said it now had more than 500 customers at run-rate above $1m, with 10,000 wider customers.
In March, the company announced its own AI model, DBRX, designed to “democratize” the training and tuning of custom LLMs for enterprises, in the hopes of cutting enterprise reliance on “small handful of closed models”.
Similarly, in October the firm announced a partnership with AWS to help customers bring generative AI applications to market more quickly.
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