Databricks plans to invest the latest funds in Lakebase, a new data warehouse product, according to Ali Ghodsi, the company's CEO.Dado Ruvic/Reuters
Analytics Firm Databricks said Tuesday that its valuation was set to increase 61% to more than $100 billion within the last year, highlighting the strong demand for investors in fast-growing artificial intelligence startups.
The company said it has signed term sheets for very late stages or Series K rounds. He said this will make it one of the most valuable AI companies in the world. Those familiar with the issue are approaching a round of more than $100 million in funding from existing investors, including Thrive Capital, Insight Partners and Andreessen Horowitz.
Thrive Capital and Insight Partners declined to comment. Andreessen Horowitz did not immediately respond to requests for comment.
Databricks said it would generate $3.7 billion in annual revenue by July, up 50% year-on-year. He also said that cash flow became positive in January. The San Francisco-based company is considered one of the most prominent candidates to be published. Databricks CEO Ali Ghodsi said in an interview that since the successful initial public offering of $1.22 billion for Figma, another venture capital startup, a $1.22 billion, the company has been flooded with investor inquiries in July.
Databricks plans to invest the latest funds in Lakebase, a new data warehouse product, following the acquisition of startup Neon, which has already generated annual revenues for tens of millions since its launch in June. The company also uses so-called AI agents, artificial intelligence, to autonomously execute tasks and achieve goals, he added.
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“This revolution is happening slowly, where we start from purchasing off-the-shelf software to coding our own internal applications for businesses,” Ghodsi said. “You invest in database migrations, which may take months, but then the revenue comes later, so you need to invest.”
San Francisco-based Databricks has around 15,000 customers, including payment company Block, energy giant shell and electric car maker Libian. Late last year, Databricks raised $100 billion in one of the largest venture capital funding rounds in history, valued at $62 billion. They hope to use some of their latest funds for AI mergers and acquisitions and hire top talent in the sector as the war of talent intensifies.
“This level of valuation indicates a concentration of late stage capital in companies identified as market leaders in the fundamental technology sector,” says Derek Hernandez, senior research analyst at Pitchbook.
According to Hernandez, investors assume that “the total addressable market is large enough to support multiple high-value companies, and Databricks maintains a durable competitive advantage.”
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Databricks has around 8,000 employees worldwide, competing with listed companies such as Snowflake, with a market capitalization of around $6.6 billion.
Startups have recently opted to stay private longer, amid higher interest rates and unpredictable appetite. Capital is available for larger later rounds as private market investors sit at record levels of dry powder. Openai is also in discussions to end employee share sales. This reported earlier this month that it values ChatGpt's parents at around $500 billion.
“We're committed to providing a range of services to our customers,” said Chris Lawrence, Founder and Managing Partners of Labyrinth Capital Partners.
