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Company expects to cross $3B in revenue run rate and achieve positive free cash flow in fourth quarter.
Databricks has secured a $62 billion valuation after raising a whopping $10 billion in one of the largest venture capital funding rounds in history, underscoring the unprecedented appetite for fast-growing private companies that have seen accelerated growth due to AI. Along with Thrive, the round is co-led by Andreessen Horowitz, DST Global, GIC, Insight Partners and WCM Investment Management. Other significant participants include existing investor Ontario Teachers’ Pension Plan and new investors ICONIQ Growth, MGX, Sands Capital and Wellington Management.
The company has seen increased momentum and accelerated growth (over 60% year-over-year) in recent quarters largely due to the unprecedented interest in artificial intelligence. To satisfy customer demand, Databricks intends to invest this capital towards new AI products, acquisitions, and significant expansion of its international go-to-market operations. In addition to fueling its growth, this capital is expected to be used towards providing liquidity for current and former employees, as well as pay related taxes. Finally, this quarter marks the first time the company is expected to achieve positive free cash flow.
“We were substantially oversubscribed with this round and are super excited to bring on some of the world’s most well-known investors who have a deep conviction in our vision. These are still the early days of AI. We are positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers and our team is committed to helping companies across every industry build data intelligence,” said Ali Ghodsi, Co-Founder and CEO of Databricks.
The funding will be mostly used to let some employees cash out their stock, which comprises a significant chunk of the compensation at startups and faces expiration after several years. According to Ali Ghodsi, the company plans to use the remaining funds to hire top AI talent, invest in new AI products, and potential M&A opportunities for startups.
“Databricks, driven by its mission to democratize data and AI, has emerged as the platform of choice,” said Joshua Kushner, CEO of Thrive Capital. “We have witnessed the team's unrelenting execution, and consider it an honor to be partners with the company for the long term.”
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