Top IPO Prospect Databricks Scores $43 Billion Valuation With AI Titan Nvidia in $500 Million Funding Round

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Artificial intelligence and analytics firm Databricks announced Thursday that it has raised more than $500 million in a Series I funding round with new strategic investor in AI leader Nvidia, as Databricks makes one of its most anticipated initial public offerings in years.

Key facts

The T. Rowe Price-led capital valued the company at $43 billion, up from a $38 billion valuation following a Series H round in August 2021.

The latest fundraising round made Databricks the eighth-most valuable private company in the world, according to Crunchbase data.

Databricks, which uses machine learning to power cloud-based data storage and processing software, is “very excited” to expand its partnership with Nvidia and “double down on generative AI,” said Databricks’ billionaire CEO Ali Ghodsi. Forbes In an interview.

Ghodsi said the new funding round does not affect the timeline of when the company will file publicly, a teaser that comes as the IPO market heats up for the first time in years with several billion-dollar tech names like Arm, Instacart and Clavio. Set to go public this month.

Databricks is looking at how the most significant IPOs fare from 2021 onwards, but the company will not be the “first mover” to get over the “hump” in the macro environment with rising inflation and interest. Rates affecting growth.

what to see

If Databricks files for an IPO, it will serve as a bellwether for the health of the global IPO market, according to David Erickson, a professor at the University of Pennsylvania’s Wharton School of Business who previously led equity capital at Barclays and Lehman Brothers. market association. Databricks “may be a more telling sign of what the IPO market is like,” Ericsson said, than companies like Arm and Instacart going public this month. ForbesNoting that the company needs a few quarters to “digest” its recent $1.3 billion acquisition of generative AI startup MosaicML.

Main background

Databricks was founded in 2013 by Ghodsi and six other researchers at the University of California, Berkeley. Forbes Databricks last month named it the No. 2 company on its Cloud 100 list of top private cloud computing companies, behind only ChatGPT parent OpenAI. Databricks’ Series I funding round also includes commitments from new investors Capital One and Nvidia, and existing investors Andreessen Horowitz and Tiger Global. Bloomberg reported last month about the new funding valuing the company at $43 billion.

The decisive quote

Since ChatGPT’s public release in November, “there’s been a complete awareness revolution in the market,” Ghodsi said. “Everybody suddenly woke up and realized, frankly, what we’ve known for a long time, which is that AI has tremendous transformative power.”

Further reading

More from ForbesAccidental Billionaires: How Seven Academics Who Didn’t Want to Make a Century Are Now Billionaires

More from ForbesIs the IPO market rebounding because of Arm & Co? Don’t go too fast.

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