Prime Highlights
• Databricks’ valuation to rise 61% to more than $100 billion in Series K round.
• Fresh capital to fund AI product development and strategic acquisitions.
Key Facts
• Company serves 15,000 global customers, including Block, Shell, Rivian.
• The latest round marks a 61% jump from its previous valuation of $62 billion
Background
Analytics and AI firm Databricks is preparing to secure a valuation exceeding $100 billion, marking a 61% jump from last year’s figure as investor demand for artificial intelligence companies continues to surge. The company announced on Tuesday that it has signed a term sheet for a Series K round, though financial details remain undisclosed.
The recent valuation shows how the company is surging in the global technology industry. In 2023, Databricks raised $10 billion in one of the largest venture capital rounds ever, which valued it at $62 billion. Analysts say the fresh round demonstrates how capital is increasingly concentrating around market leaders in foundational technologies.
“This valuation level indicates a concentration of late-stage capital into companies identified as market leaders in foundational technology sectors,” said Derek Hernandez, senior research analyst at PitchBook.
The company counts more than 15,000 clients, including fintech, energy, and automotive companies. Major customers include Block, Shell, and Rivian. The company employs around 8,000 people worldwide. Funds from the new round will be used to accelerate product development and support mergers and acquisitions in the AI space.
The company is under threat from Snowflake, a publicly traded data cloud service company with a valuation of approximately 66 billion dollars. Other AI companies, including OpenAI, creator of ChatGPT, are also gaining unprecedented valuations, recently completing an employee share sale that puts the company at a total valuation of nearly $500 billion.
Analysts point out that a lot of startups are not going public yet and raise big late-stage rounds at that rather than proceed with IPOs in the face of volatile markets and high interest rates. This has been the pattern as the role of private capital as a source of funding, taking the form of public equity, is based.
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