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Good morning. Databricks is raising over $4 billion in Series L funding that would value the data-analytics and artificial-intelligence software company at $134 billion, The WSJ Leadership Institute reports. You can read Belle Lin’s exclusive story here.
The San Francisco-based company also said it crossed $4.8 billion in annual revenue run rate at the end of October, up from the $4 billion it announced a few months ago. Databricks makes money by renting out analytics capabilities, AI and other cloud-based software that taps AI-ready data for building enterprise tech systems.
Databricks’ latest funding is led by Insight Partners, Fidelity Management & Research Co. and J.P. Morgan Asset Management with additional participation from Andreessen Horowitz. The valuation is an increase of 34% from its last funding round over the summer.
Funding growth. Ali Ghodsi, Databricks’ co-founder and chief executive, said the company plans to use the cash to invest in its core data-analytics products and AI software, as well as allow its employees to conduct secondary share sales.
Databricks, one of Silicon Valley’s most valuable private firms, expects to hire about 600 new college graduates next year, Ghodsi said. Overall, Databricks plans to add thousands of new jobs, including in Asia, Europe and Latin America. It will also invest in hiring AI researchers, who typically command high salaries. The company’s AI lab currently employs about 100 people, according to Ghodsi.
Rising demand for AI. Ghodsi attributed the company’s revenue run-rate growth, which he said is up over 55% year-over-year, to the idea that businesses are building “data-intensive applications that use AI.”
Such applications, which are often built with AI, require a platform like Databricks’ to act as the back-end database, Ghodsi said.
“What’s become more and more clear is that the large language model is becoming a commodity,” he said. “The secret sauce is, ‘Do you have, for your company, data?’ And typically it’s massive amounts of data.”
Companies are waiting longer and longer before they list their stocks publicly—and are typically much bigger when they finally do. Many are finding they can drum up funding in the private market, where disclosure rules are significantly less stringent, and that they can control who owns pieces of their company.
Still, Databricks may be somewhat of an anomaly. Series L funding rounds aren’t common, and they’re not expected to become more widespread, according to Kyle Stanford, PitchBook’s director of U.S. venture-capital research.
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