AI Startup Databricks Hits $62 Billion Valuation in VC Round
The cloud-based AI and data analytics startup called Databricks boosted its valuation to $62 billion after receiving venture capital funding. As Reuters reported, achieving this milestone makes the company one of the leaders among the major players in artificial intelligence technologies as it has received a fund of $10 billion.
Led by T. Rowe Price Associates owned by Joshua Kushner, this VC funding round attracted leading financial investors like Andreessen Horowitz and Coatue Management, Canaan, and Tiger Global Management, the company reached $1.6 Billion in the funding round. Other participants of the round included existing investors Ontario Teachers’ Pension Plan, and new investors ICONIQ Growth, MGX, Sands Capital, and Wellington Management.
This is one of the biggest VC funding rounds ever and will help to meet the increased interest in AI tools to support companies’ development. AI startup Databricks is looking forward to receiving positive free cash flow in January 2025 and is aiming to hit a revenue run rate of $3 billion after the latest funding round. The company has surpassed Open AI, which raised a funding of $6.6 billion in October, and Elon Musk’s xAI which raised $6 billion.
Databricks’ Rapid Rise in AI
AI startup Databricks was started in 2013 by a team of data scientists and engineers who have developed a strong demand in a short span of time for its integrated data processing system backed by artificial intelligence and machine learning. The Lakehouse platform is the primary product of the company that integrates data warehouse and artificial intelligence solutions to provide better insights to businesses. Some of the clients include Comcast, Shell, and CVS health among others this shows that the data analytics startup has been effective in expanding its market across different sectors.
The company’s CEO Ali Ghodsi attributed Databricks’ boosted valuation to the fact that the firm is highly capable of meeting the increasing demand for AI and big data. “Our mission has always been to democratize data and AI for every organization,” said Ghodsi.
What’s Next for Databricks?
According to the CEO, Ali Ghodsi, Databricks will use the capital from the latest funding round to let some employees cash out their stocks. It will also use a big chunk of the funds to hire the best AI talents, venture into new AI products, and look for merger opportunities with other AI startups.
He said, “The company, I believe, will be a public company for the majority of its lifetime. And it’s not if, it’s a when. The absolute theoretically earliest we could do it would be next year, but we have some flexibility now. The thing that is top of mind for management and me is providing liquidity opportunities to the employees.”
Vince Hankes, partner at Thrive Capital said, “Databricks is one of the iconic private tech companies that we think are poised to become the next platforms. And in technology, the platforms have shown that as they get bigger, they get better, and there’s more advantages to scale.”
Analysts believe that the Databricks valuation boost is a benchmark for the tech industry and highlights the company’s power to bring in a revolution in the industry.
