Databricks Valuation Hits US$62bn After Latest VC Round

The enterprise AI sector continues to attract significant investment as companies seek to harness AI capabilities for business operations. This trend has culminated in one of the largest private funding rounds of 2024, as Databricks – which develops data analytics and AI software for enterprises – has announced that it has secured US$8.6bn of a planned US$10bn funding round led by venture capital firm Thrive Capital, valuing the company at US$62bn.

The investment comes amid increasing corporate demand for tools that can process and analyse large volumes of data to drive AI applications. This demand has intensified as organisations across sectors from healthcare to financial services seek to integrate AI capabilities into their operations while maintaining control over their data infrastructure.

Databricks funding shows growing enterprise AI appetite

The round, which includes participation from existing investors Andreessen Horowitz, DST Global, GIC, Insight Partners and WCM Investment Management, comes as enterprises increase spending on AI infrastructure. New investors include ICONIQ Growth, MGX, Sands Capital and Wellington Management, alongside existing investor Ontario Teachers' Pension Plan.

The company plans to use the capital for product development, acquisitions and international expansion. A portion will provide liquidity for current and former employees, including funds to cover related tax obligations.

“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,” says Ali Ghodsi, Co-Founder and CEO of Databricks. “These are still the early days of AI. We are positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers.”

Data Intelligence Platform drives healthcare and climate innovation

The Databricks Data Intelligence Platform combines data warehousing, which organises enterprise data, with machine learning capabilities that enable companies to build AI applications. Built on open-source software, which allows developers to view and modify the underlying code, the platform is used by customers including Block, Comcast, Condé Nast, Rivian and Shell.

The platform supports organisations in sectors from healthcare to climate technology. Customers use the technology to detect diseases earlier, develop pharmaceuticals, identify climate change solutions and reduce time to mental health intervention. Financial services firms employ the platform to detect fraud and address local financial inequality.

The company reports revenue growth of 60% year-on-year in the third quarter of 2024. Its data warehousing product, Databricks SQL, reached US$600m in revenue run rate, representing 150% growth.

Joshua Kushner, CEO of Thrive Capital, says: “Databricks, driven by its mission to democratise data and AI, has emerged as the platform of choice. We have witnessed the team's unrelenting execution, and consider it an honour to be partners with the company for the long term.”

Global expansion continues as enterprise demand grows

The company maintains subscription gross margins above 80% and serves 500 customers spending over US$1m annually. These metrics have supported international growth, with Databricks opening regional offices in London for European operations and Singapore for Asia Pacific markets.

The funding allows Databricks to expand its presence in Latin America and the Middle East as demand for enterprise AI infrastructure increases. The company expects to achieve positive free cash flow in the fourth quarter ending January 31, 2025.

Databricks serves more than 10,000 organisations worldwide, including over 60% of Fortune 500 companies. The company maintains its headquarters in San Francisco and was founded by the creators of several open-source data projects including Lakehouse, Apache Spark, Delta Lake and MLflow.

These technologies form the foundation of modern data infrastructure. Apache Spark processes large amounts of data across computer clusters. Delta Lake provides reliable data storage and processing. MLflow helps organisations manage the machine learning development cycle from training to deployment.

“We're building transformative data and AI infrastructure and are excited to move aggressively in service of our customers and their success,” says Ali.

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