With the demand for data management tools and services growing, Databricks has attracted investor attention. The cloud-based data analytics platform has been decades in the making, gradually establishing itself in the industry.
Now that it has become one of the world’s ten most valuable startups and shows no signs of slowing down, many analysts wonder if a Databricks IPO is imminent.
In this post, we’ll explore the IPO plans and current financial status of Databricks.
Databricks is an enterprise software company that provides businesses with AI-powered data management. It’s the first cloud-based lakehouse platform, combining the best features of data lakes with those of data warehouses to create a unified data and AI platform.
In 2013, Ali Ghodsi, a Swedish-Iranian computer scientist, co-founded Databricks, along with the original creators of Apache Spark, the core of the Databricks platform. The goal was to develop a more unified and faster commercial alternative to Apache Spark.
The platform offers data scientists, analysts, and engineers open-source platforms that combine data science, data engineering, and machine learning, such as Delta Lake and MLflow. As such, building, testing, deploying, maintaining, and sharing data is much easier and more efficient.
Databricks is headquartered in San Francisco and operates in over 12 countries worldwide. It provides its services to over 7,000 organisations worldwide, including Shell and ABN AMRO Bank.
In addition, it has over 1,200 global partners, including Amazon, Informatica, and Microsoft.
In just ten years, Databricks has been able to raise $3.5 billion in funding at a $31 billion valuation, becoming the ninth most valuable startup in the world. This could explain why the company doesn’t have any immediate plans for an IPO.
Databricks has had nine funding rounds, raising a total of $3.5 billion from investors such as Counterpoint Global, Battery Ventures, and Franklin Templeton.
In 2013, Databricks emerged from stealth mode with an initial funding round of $13.9 million. A year later, the company had a Series B round where it raised an additional $33 million. This round allowed Databricks to roll out the company’s first cloud product, Databricks Cloud.
From 2016 to 2019, Databricks raised around $850 million in multiple funding rounds that were led by the venture capital firm Andreessen Horowitz. During these fundings, Databricks was able to expand and provide its services to around 5,000 companies.
This explosive growth is perhaps what led Databricks to secure a total of $2.6 billion over Series G and Series H funding rounds in 2021.
The company earmarked the first $1 billion to focus on acquiring data and machine learning tech startups to merge their technology with Databricks’. The Series H funding, on the other hand, was allocated to develop further and accelerate the data lakehouse.
In 2020, Databricks acquired Redash, a collaborative data visualisation and dashboarding platform that simplifies data and AI tools. It allows data practitioners to visualise, query, collaborate, share insights, and democratise access from their data lake.
Databricks also acquired 8080 Labs in 2021. 8080 Labs is a German startup known for its UI-based data science tool, bamboolib. This low-code data exploration tool makes it easier for citizen data scientists to perform comprehensive tasks, such as data analysis.
With this acquisition, Databricks aims to make its lakehouse platform more accessible, democratising data and AI tools to a broader audience across an enterprise.
In 2022, Databricks acquired Cortex Labs, an open-source platform that can accelerate model serving and machine learning operations (MLOps) on the Databricks system.
Later that year, Databricks also acquired DataJoy Inc., a metrics platform that turns raw data into actionable insights. These insights enable businesses to increase efficiency, drive revenue growth, and identify market opportunities.
According to CEO Ali Ghodsi, Databricks has enough cash left over from previous funding rounds to acquire other tech startups. With each new acquisition, Databricks inches closer to its goal of becoming a one-stop shop for all enterprise ETL work.
So far, Databricks hasn’t filed for an IPO or announced an official date for listing.
In 2020, the software company hinted at its plans to go public, with CEO Ghodsi stating that there’s a high investor demand. However, any plans to go public in 2021–2022 had to come to a halt as inflation and interest rates increased.
There’s no telling if that's the reason Databricks IPO hasn’t happened yet. According to CEO Ghodsi, stock market volatility has no bearing on the timing of a Databricks IPO.
It’s just that Databricks isn’t in a rush to go public, which could be due to its valuation from its August 2021 funding round.
That said, should the frozen IPO market start to thaw, many analysts believe Databricks will be among the first companies to go public. So, there’s a possibility of Databricks going public by the summer of 2023.
Although there are no immediate plans for a public market debut, Databricks remains one of the most anticipated IPOs. The company has been on a meteoric trajectory, even when its valuation dropped from $38 billion to $31 billion.
In the second half of 2022, the software company revealed that it crossed an annual run rate of $1 billion and that its revenue was growing at more than 80% annually.
This milestone is impressive because Databricks’ revenue growth came at a time when many other highly-valued decacorns were slashing their valuations and laying off employees.
As a result, many analysts estimate that Databricks will be even more profitable than Snowflake's IPO, which was one of the most lucrative IPOs in software history.
It’s difficult to estimate Databricks’ post-IPO valuation, given that the company doesn’t disclose its profitability.
What we do know is that Databricks is intent on replacing the traditional data warehouse with its unified analytics platform. So, the most likely outcome of a Databricks IPO is the company’s continued expansion and development of its Lakehouse software.
As the data management market grows and evolves, the field becomes more competitive, with each company trying to eat the other's lunch. One of Databricks’ biggest competitors is Snowflake.
Initially, the two platforms served different functions, allowing them to develop and become leaders in their respective fields of expertise: Snowflake as a data warehouse and Databricks as a data lake.
However, over time, the two platforms started branching into each other’s territory. Snowflake added data science workloads, such as Snowpark and Snowflake for Apache Iceberg.
In contrast, Databricks added the features of a data warehouse to its core AI workload through Databricks SQL, Delta Lake, and Unity Catalog.
These additional features allow Snowflake and Databricks to function as both a data lake and a data warehouse, a concept known as the lakehouse. As the lines blur between the two platforms, Snowflake and Databricks continue to duel, each trying to outperform the other.
Other Databricks competitors include:
How To Invest In The Databricks IPO
Databricks stock is obviously not going to be easy to buy; like all Pre-IPO companies Databricks shares will be difficult for a retail investor to acquire, but not impossible.
The most reasonable chance that an ordinary investor has of investing in Databricks early on is by activating an account with eToro, as they will make the Databricks stock at the IPO available to you at the earliest opportunity.
US citizens can register for the Databricks IPO by using this link.
If you are in the UK, UAE, Europe, Australia and most other countries, then register for IPO Databricks Shares using this link.
If eToro is not currently serving your Country, then we suggest signing up with Switchmarkets, they have a wide range of financial products available and they will make new issues like Databricks available to you early on. They also offer a one-time sign-up bonus of up to $5,000.00. Register for Databricks stock here.
While no specific date for the Databricks IPO has been set yet, the company intends to go public by summer 2023, which is when the IPO market is expected to recover.
Databricks shows great potential to become a universal data platform like Snowflake and Microsoft. It’s already one of the world’s fastest-growing and most valuable enterprise software companies.
That’s why, even with increasing interest rates and plummeting valuations, Databricks seems to be a promising investment opportunity.
View The Databricks Pre-IPO Brochure
The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions. We hold no stock or interests in any of the Companies discussed on this website/app.
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