TLDR
- Databricks completed $5 billion equity raise at $134 billion valuation with $2 billion debt financing led by JPMorgan Chase
- Revenue reached $5.4 billion annualized in Q4, jumping 65% year-over-year while achieving positive free cash flow
- AI products generate $1.4 billion in annual revenue as company develops Lakebase database and Genie assistant
- CEO confirms IPO readiness but prefers staying private to avoid market volatility affecting software stocks
- Funding round oversubscribed despite competitors Oracle and Snowflake falling 13% last week
Databricks raised $5 billion in new funding at a $134 billion valuation on Monday. The private data analytics company also secured $2 billion in debt capacity.
The round came as software stocks tumbled on AI disruption concerns. Oracle and Snowflake shares each dropped 13% last week.
But investors rushed to back Databricks. The equity round was oversubscribed.
CEO Ali Ghodsi said the $7 billion total capital raise makes Databricks “really well capitalized, in case there’s a winter coming.” The company can now weather market turbulence while continuing to invest in growth.
Revenue Surges Past $5 Billion
Databricks reported $5.4 billion in annualized revenue for the January quarter. That represents 65% growth from the previous year.
The company achieved positive free cash flow over the past 12 months. This financial performance demonstrates strong unit economics.
AI products now drive $1.4 billion in annual revenue. The platform helps enterprises connect data with AI models to build custom agents.
Growth is accelerating. Databricks forecast only 50% growth back in June.
Goldman Sachs, Glade Brook Capital, Morgan Stanley, Neuberger Berman and Qatar Investment Authority joined the equity round. JPMorgan Chase led the debt financing.
Bigger Than Snowflake
Databricks now surpasses rival Snowflake in size. Snowflake reported $1.21 billion in quarterly revenue, giving it roughly $4.8 billion annualized.
Snowflake’s market cap stands at $58 billion. That’s less than half Databricks’ private valuation.
The company will use new capital to accelerate Lakebase development. This AI-focused database competes with Oracle and SAP.
Funds also support Genie, Databricks’ conversational AI assistant. These products position the company as an AI infrastructure beneficiary.
Ghodsi told Reuters investors recognize Databricks benefits from AI adoption. “Anything that the AI layer directly uses is going to increase in exploding consumption because you have these agents running around doing it,” he said.
IPO Timeline Flexible
Databricks remains prepared to go public “when the time is right,” Ghodsi told CNBC. But staying private offers advantages.
The company avoids quarterly reporting pressures. Management can focus on long-term strategy without public market swings.
“If this correction hasn’t bottomed out yet, and it’s just going to continue, we’re just going to continue as a private company,” Ghodsi said.
Databricks initially announced plans to raise over $4 billion in December. The final amount exceeded expectations.
“We weren’t sure we’re going to actually be able to raise all of the five,” Ghodsi said. Interest surged in recent weeks.
The company plans employee liquidity options later this year. This will use the strengthened balance sheet.
Databricks joins SpaceX, OpenAI and Anthropic as potential 2026 IPO candidates. The company now holds billions in cash reserves to fund continued expansion in the enterprise AI market.
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