By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > News > Databricks raises $10bn in the biggest US venture deal this year
News

Databricks raises $10bn in the biggest US venture deal this year

News Room
Last updated: 2024/12/17 at 2:34 PM
By News Room
Share
4 Min Read
SHARE

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Databricks has raised $10bn in the biggest venture capital deal of the year, giving the US data analytics and artificial intelligence company a valuation of $62bn.

The company raised the cash from some of the largest and most active technology investors in the US, including Thrive Capital, Andreessen Horowitz, Insight Partners and Iconiq Growth.

The funding round for the 11-year-old company is exceptionally large by the standards of venture capitalists, who historically have funded early- stage start-ups at much lower valuations. The deal is a reflection of how VCs are shifting tack as private markets balloon.

The new capital will help Databricks compete with AI start-ups such as OpenAI and Anthropic for talent, said Ali Ghodsi, co-founder and chief executive of Databricks.

“The talent war for AI is like no other time before. Already it was pretty insane levels of compensation for software engineers in Silicon Valley, and it’s gone up from there,” he said.

Thrive alone invested “at least” $1bn into the round, according to Vince Hankes, a partner at the firm, which recently raised a $5bn fund. Thrive, founded by Josh Kushner, has made a series of massive bets in companies including Stripe and OpenAI. Databricks “are in this to build the next $1tn infrastructure company”, said Hankes. 

The “vast majority” of the $10bn will go towards helping employees at the start-up cash out lucrative stock options and to pay the taxes they incur when those options vest, according to Hankes. He compared the deal to Stripe’s $6.5bn raise last year, which allowed the payments company to meet billions of dollars of tax liabilities associated with employees’ stock units.

Many start-ups that have remained private for a decade or more are facing a similar issue: many stock units are taxed as income when they vest, while others cannot be realised until a company has a liquidity event, leaving employees with either large tax bills or the bulk of their wealth effectively tied up.

Finding ways to “release the pressure” for employees would help start-ups such as Databricks compete for talent with public companies such as Alphabet, where employees can sell their shares at any time, said Hankes.

Providing early employees a way to sell their stock has been a motivating factor behind many of the largest deals for venture-backed companies over the past year, including at AI company OpenAI and Elon Musk’s SpaceX.

The remainder of Databricks’ new capital will be invested into “new AI products, acquisitions, and significant expansion of its international go-to-market operations”, the company said on Tuesday.

Other investors in the round include Singaporean sovereign wealth fund GIC; early Twitter and Facebook investor Yuri Milner’s DST Global; and MGX, a recently launched UAE fund focused on AI and chaired by the country’s powerful national security adviser, Sheikh Tahnoon bin Zayed al-Nahyan.

Databricks has grown rapidly in the past year and was expecting annualised revenue to hit $3bn by the end of next month, the company said on Tuesday. Databricks also expects to record positive free cash flow for the first time at the end of January.

That has pushed Databricks’ valuation up from $43bn in September last year.

The new capital and growing revenue meant Databricks is not in a rush to go public, said Ghodsi. “The absolute earliest we would go public is next year, but we have flexibility now.”

Read the full article here

News Room December 17, 2024 December 17, 2024
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Elon Musk wants to launch a new political party. Here’s why some people think it won’t work.

Watch full video on YouTube

Why Even High Earners Are Living Paycheck To Paycheck

Watch full video on YouTube

Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

This article was written byFollowThe Investment Doctor is a financial writer, highlighting…

“Invest in what you know.”

Watch full video on YouTube

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

The last time Tom Hayes had his picture taken at London’s Southwark…

- Advertisement -
Ad imageAd image

You Might Also Like

News

Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

By News Room
News

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

By News Room
News

Wall Street Roundup: Tesla Skepticism, Google Stands Out, DORK Shorts

By News Room
News

Deutsche Bank Aktiengesellschaft (DB) Q2 2025 Earnings Call Transcript

By News Room
News

Asian automakers’ profits tumble after ‘unprecedented’ effects of US tariffs

By News Room
News

The polarising power of Andriy Yermak, Ukraine’s other wartime leader

By News Room
News

Turning Point Brands: Is This ‘Smokeless’ Stock Too Hot To Touch? (NYSE:TPB)

By News Room
News

Macrons file US lawsuit over claims France’s first lady was born male

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?