Databricks is in talks to raise $5 billion (€4.3 billion) at a valuation of $134 billion. That is 32 times the expected revenue of $4.1 billion for this year.
This is according to The Information, based on sources. Databricks is said to have already revised its revenue forecasts upwards twice this year. In September, the company raised its forecast from $3.8 billion to $4 billion. Shortly afterwards, another upward correction followed. For the whole of 2024, Databricks expects revenue growth of 55 percent.
However, the AI focus also presents challenges, the company reportedly told investors. Gross margins are falling from 77 percent to 74 percent. According to sources, this is due to the increased use of AI products. In September, Databricks reached a run rate of $4 billion, with AI products accounting for approximately $1 billion in revenue.
High expectations among investors
The new financing round comes on top of earlier investments this year. At the beginning of this year, Databricks already closed a Series J round of $10 billion at a valuation of $62 billion. The valuation rose further in August to nearly $100 billion amid continued investor interest.
Founded in 2013, Databricks offers a platform that allows users to process and analyze data and build AI applications. Databricks has become the top choice, particularly for running AI workloads. The company has been considered a top candidate for an IPO for years. That IPO has been postponed for the time being. CEO Ali Ghodsi previously indicated that he wanted to wait until market volatility subsided.
Databricks has more than 20,000 customers. The company competes with players such as Snowflake, Google BigQuery, and Amazon Redshift for market share in the rapidly growing data analysis and AI platform market.