Ali Ghodsi, co-founder and CEO of Databricks Inc., speaks during a television interview with Bloomberg Technology in San Francisco on October 22, 2019.
David Paul Morris | Bloomberg | Getty Images
One of the world's most valuable private technology companies is raising billions more in cash and is in no rush to go public, sources told CNBC.
San Francisco-based Databricks is raising at least another $5 billion in its latest funding round, though it could raise as much as $8 billion as the round continues, according to several people familiar with the matter, who asked to remain anonymous. Because of the discussions. It was special. The latest raise would value the company at $55 billion, and could headline the largest round of the year, by OpenAI.
The latest financing is designed to help Databricks employees sell stock, one of the people said. Reducing pressure on the part of employees to cash out also reduces the need for a liquidity event such as an IPO. The funding round makes Databricks' expected public debut less urgent, one of the people said. But it could still happen in the back half of next year.
Founded in 2013, Databricks sells software that helps organizations organize data and build their own generative AI products. It uses machine learning to help customers from AT&T to Walgreens analyze and understand vast amounts of data.
This equity round could be the largest in a banner year for AI funding, with 1 in every 3 investment dollars going to an AI startup, according to CB Insights. OpenAI holds the record in 2024, raising $6.6 billion in October at a $157 billion valuation.
Databricks last raised $500 million at a $43 billion valuation. It's supported Nvidia, Capital OneAndreessen Horowitz, Baillie Gifford, Fidelity, Insight Partners, Tiger Global and others.
The Information first reported that Databricks was raising funds.
The company has benefited from momentum in the field of artificial intelligence. This summer, it acquired MosaicML, a $1.3 billion software startup focused on large language models that can produce natural-looking text. Databricks told investors earlier this year that annual revenue would reach $2.4 billion by mid-2024.
Its decision to remain private comes as software stocks struggle to emerge from a rut caused by rising interest rates. Shares of rival Snowflake have fallen 13% this year. While fellow software IPO candidates, such as Stripe, have taken significant valuation cuts, Databricks has increased its value while expanding its employee base.
CEO Ali Ghodsi said at a conference on November 20 that he is working to improve Databricks' success over the next decade or two, not improve the IPO.
“If we were to go, the soonest would be, let's say, the middle of next year, or something like that,” Ghodsi said at the Cerebral Valley AI Newcomers Conference. “So, you know, it could happen next year.”
A Databricks spokesman declined to comment.
Correction: OpenAI raised $6.6 billion in October at a $157 billion valuation. A previous version of this article misstated the assessment amount.
