Databricks, a leading software firm specializing in data analytics, is on the brink of closing one of the largest venture capital funding rounds in history. According to insider sources, the San Francisco-based company is set to raise over $9.5 billion in a round that has attracted immense investor interest and is nearly twice oversubscribed. The final amount, expected to be announced next week, could climb even higher.
This latest funding round positions Databricks with a valuation exceeding $60 billion, at a share price of $92.50. Many investors regard this price as a compelling opportunity, given the company's projected revenue of $3.8 billion for the next fiscal year. Leading this landmark round are Thrive Capital, along with returning investors Andreessen Horowitz, Insight Partners, and Singapore’s sovereign wealth fund, GIC.
The equity raise coincides with Databricks' discussions to secure $4.5 billion in debt financing. This includes a $2.5 billion term loan sourced from direct lenders. The debt arrangement, initially reported by Bloomberg, reflects the firm's strategy to optimize its financial position as it scales its operations.
Founded in 2013, Databricks provides a cloud-based platform designed to help enterprises process, analyze, and manage data while enabling the development of AI-driven applications. The company has seen a meteoric rise in demand for its services, fueled by the growing need for robust data analytics and AI solutions in the business world.
Despite its rapid growth, Databricks has yet to achieve profitability. However, this record-breaking funding round would mark a significant milestone for the 11-year-old firm. A portion of the raised capital will be allocated to buying back expiring restricted stock units (RSUs) from early employees and covering the associated tax costs. This move is expected to benefit early employees significantly while strengthening investor confidence.
The issuance of preferred shares to investors participating in the round further underscores the strategic importance of this funding initiative. While Databricks and Thrive Capital have declined to comment, the involvement of high-profile investors reflects strong market confidence in the company's future prospects.
This latest development follows Databricks' September valuation of $43 billion, signaling substantial growth and investor optimism. As the company finalizes the deal, it stands poised to solidify its position as a leader in the data analytics and AI industry.
