Databricks, the San Francisco-based data and AI company, is on the verge of becoming one of the world’s most valuable private tech firms. The company confirmed that it has signed a term sheet for a late-stage Series K funding round, which would push its valuation beyond $100 billion—a staggering 61% increase from its last raise just months ago.
The round, reportedly over $1 billion, is being led by longtime backers Thrive Capital, Insight Partners, and Andreessen Horowitz. If finalized, this would cement Databricks’ position as not just a leader in the AI space, but also as one of the most closely watched IPO candidates in the tech sector.
Why investors are piling in
So why are investors doubling down? Analysts point to the company’s rapid revenue growth and strong financial footing. Databricks said it expects to generate $3.7 billion in annualized revenue by July, representing 50% year-over-year growth. Perhaps even more importantly, the company turned cash-flow positive earlier this year—something many late-stage startups struggle to achieve.
Industry watchers suggest that this level of profitability, paired with sky-high demand for AI infrastructure, makes Databricks a rare find in today’s venture capital landscape. As one research analyst noted, late-stage investors are concentrating their bets on companies with “durable competitive advantages” in foundational technologies, and Databricks seems to fit the bill.
Building the future of data and AI
CEO Ali Ghodsi has made it clear where the new money will go. A significant portion is expected to support Databricks’ Lakehouse data warehouse product, which blends traditional data storage with AI-powered analytics. The firm’s recent acquisition of Neon, a startup specializing in serverless databases, has already begun generating tens of millions in revenue since its June launch.
But that’s not all. Databricks is also pouring resources into building so-called “AI agents”—autonomous software systems designed to perform complex tasks with minimal human input. Ghodsi described the trend as a “slow revolution” in IT, where companies are moving away from purchasing off-the-shelf software and instead creating tailored internal tools powered by AI.
Competitive landscape and big-name customers
With 15,000+ customers, including Block, Shell, and Rivian, Databricks has a diverse customer base across industries. The company now has 8,000 employees globally. Its biggest competitor in the public markets is Snowflake, a $66B company. The competition between the two has driven rapid innovation in data management as both companies go after enterprise customers looking to scale AI.
Private markets and AI gold rush: Databricks funding comes at a time when startups are staying private longer and avoiding the volatility of the public markets. Venture firms sitting on record amounts of capital are more willing than ever to fund mega rounds in companies they think will dominate the next tech cycle. And the AI sector has become a magnet for late-stage money. OpenAI is said to be finalizing a share sale at a $500B valuation.
The fact that Databricks can get to a $10B valuation in this environment says a lot about investor conviction in the business. Industry leaders say this is a shift in how late-stage capital works: what used to be a pre-IPO round now looks like quasi-public equity with fewer guardrails but massive upside.
Databricks hasn’t confirmed a timeline for going public. However, speculation is growing that an IPO could happen in the next couple of years, especially as competitors like Figma have recently gone public. For now, the company is focused on expanding the product suite, making acquisitions, and hiring top AI talent in a competitive market. If nothing else, this funding round says one thing: the AI boom is far from over, and Databricks is betting it can stay in the middle of it.
