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Databricks is in Talks to Raise Funds at an Estimated Valuation of $43 Billion

August 26, 2023
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Databricks Inc., a privately held software company widely considered a potential candidate for a public offering, is currently engaged in discussions with T. Rowe Price regarding a potential new funding round. According to two individuals familiar with the matter, this funding round would potentially value Databricks at $43 billion.

It's important to note that these discussions are still at a preliminary stage and there exists a possibility that they might not progress further. These sources, who requested anonymity due to the confidential nature of the talks, revealed this information. Should this funding round be successful, it would mark a significant increase in Databricks' valuation compared to the $38 billion valuation it achieved two years ago through funding led by Counterpoint Global.

A spokesperson representing Databricks refrained from commenting on the matter. Earlier, The Information had reported that the company was actively engaging in discussions with potential investors for fundraising.

In a recent interview with Bloomberg, Databricks' CEO, Ali Ghodsi, mentioned that the company is currently well-financed and not under immediate pressure to raise capital. However, he acknowledged the possibility of considering such a move for strategic reasons.

Ghodsi stated, "There's always talks with investors. We're getting inbound requests all the time."

While numerous startups are witnessing declining valuations and some have been compelled to seek downrounds from investors, Databricks, headquartered in San Francisco, is capitalizing on the rising interest in artificial intelligence.

Earlier this year, Databricks unveiled "Dolly," a substantial language model aimed at assisting customers in developing their own generative AI applications akin to ChatGPT. In June, the company proudly announced reaching $1 billion in annual revenue. Moreover, Databricks revealed plans to acquire the generative AI platform MosaicML for approximately $1.3 billion during the same month.

Previously considered an IPO contender until the beginning of the year, Databricks' CEO, Ghodsi, confirmed that no specific timeline is currently in place for an initial public offering. He explained that the recent downturn in markets has disrupted such plans.

Ghodsi elaborated, stating, "The markets are closed. If they had not been closed, we would have already been public."

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