Why IPO when you can Series L?
That’s the question Databricks is answering this week with the announcement that it’s raising more than $4 billion in its latest funding round. That puts its valuation at $134 billion — a 34% jump from a previous funding round over the summer. This one was led by Insight Partners, Fidelity Management & Research Company and J.P. Morgan Asset Management, with additional participation from Andreessen Horowitz.
Gone are the days when startups fought for scraps in public markets. Today, many young companies are forgoing the opportunity to ring the stock exchange bell in order to sidestep the regulatory scrutiny that comes with an initial public offering. Research from the University of Florida shows that the median age of companies debuting on the public market was six in 2000, compared with 14 in 2024. In May, OpenAI closed the largest private tech deal on record with a $40 billion funding round.
But Databrick’s financing may still be somewhat of an anomaly, since Series L funding rounds aren’t common and aren’t expected to become common, Kyle Stanford, PitchBook’s director of US venture-capital research, told The Wall Street Journal.
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The AI boom has been very good to Databricks.
The private tech giant provides a cloud-based platform for companies to store, process and analyze their data, as well as develop custom AI models. In the past year, it began partnering with AI safety and research company Anthropic to help companies make their own AI bots, and with OpenAI to make its models available in Databricks products. With this new funding, it’s continuing to go all in on AI:
The company said it would use the new capital to grow its AI-driven applications, support future AI acquisitions, deepen AI research and provide liquidity for its employees.
“Databricks investors are pricing in a world where every corporation is a data company and needs a unified platform to clean, analyze and operationalize information,” Michael Ashley Schulman, partner at Running Point Capital Advisors, told Reuters.
Revving up Revenue: Databricks said it topped $4.8 billion in annualized revenue during its third quarter — up 55% from a year earlier.
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