Databricks, “The Data Phenomenon”

Last month, I attended a Databricks conference in Mountain View with my daughter, a data scientist. Databricks, an 11-year-old powerhouse in databases and analytics software, is generating $2.6B in revenue (a 57% increase from 2023), and expects an annual growth rate of 40%+ for the next two years.

I was in awe with the ingenuity of this platform and by the seamless integration of Mosaic ML — a $1.3B acquisition from June 2023, specializing in training LLMs and deploying GenAI tools. My immediate takeaway? We must invest in Databricks!

Well, this week, Databricks announced the largest ever VC funding round: an eye-popping $10B series J, bringing its valuation to $62B (to put into perspective, all Brazilian startups combined raised ~$4.0B across 2023 and 2024).

Thrive Capital led the round with a $1B investment, alongside continued support from Andreessen Horowitz and Insight Partners. Other top-tier investors like Lightspeed, Kleiner Perkins and Founders Fund joined the cap table for the first time. Major mutual funds such as Fidelity, T. Rowe Price, Franklin Templeton, and BlackRock, along with sovereign wealth funds like Singapore’s GIC and Abu Dhabi’s MGX, also contributed significant capital.

Interestingly, most of this breaking-record funding round is non-dilutive, meaning that most of the capital is going toward buying employees’ shares in a tender offer. So, essentially, this fundraise is an employee liquidity event.

The decision by VCs to back mature startups signals renewed optimism that the two-year IPO drought may be ending. In addition, VCs are seeking safer bets to offset riskier AI investments that have yet to prove that they can generate meaningful revenue.

Databricks is in an enviable position to tap private markets for funding that it would have historically looked to public markets for. So, Databricks can extend its life as a private company, waiting for the “optimal” time to go public. Ali Ghodsi, Databricks founder and CEO, hinted that the IPO should happen in 2026.

Conclusion

Ronaldo, the Brazilian football legend, is famously nicknamed “The Phenomenon” for his exceptional skills and impact on the sport. He modernized the role of a striker with his unparalleled blend of speed, power, and technical ability.

Similarly, Databricks is emerging as “The Data Phenomenon”. And we are thrilled to play alongside this new phenomenon.