Databricks Sets Sights on IPO With $1B Funding Round

Emerging data lakes provider Databricks has raised $1 billion via a Series G funding, attracting investors like AWS, Microsoft, and Salesforce Ventures and raising its valuation to an impressive $28 billion ahead of a blockbuster IPO it plans to launch this year.   

The latest funding round comes a little more than a year after Databricks raisedOpens a new window $400 million at a $6.8billion valuation in October 2020. This funding round was led by Franklin Templeton and involved AWS, Fidelity Management & Research LLC, Alphabet’s CapitalG, Microsoft, and Salesforce Ventures, among others.

While this is the first time that Amazon Web Services and Alphabet have invested in Databricks, the company already enjoys a healthy partnership with Microsoft. The Azure Databricks platform lets organizations conduct data engineering, machine learning, and analytics while ensuring security and compliance for high-impact data analytics and AI across a wide range of use cases.

Databricks has also partnered with AWS in the past. In November 2019, the company integratedOpens a new window its Unified Data Analytics Platform with AWS Data Exchange, allowing AWS customers to combine their internal data with third-party data sets from data providers and perform advanced analytics to gain deeper insights. “We’re delighted to work with Databricks to help customers securely and easily find and use data for research, analytics, and training machine learning models to optimize their business through data-driven decisions,” said Noah Schwartz, Head of Engineering for AWS Data Exchange.

See More: Snowflake Is Now Worth $12.4B After Raising $479M in Funding

Considering that Microsoft, Google, and Amazon are the top three contenders in the cloud computing space, their presence at the funding round validates Databricks’ approach to data and analytics as intriguing and successful. “Together, we will continue to build on the success of Azure DatabricksOpens a new window and seamless integrations across Azure data services to enable cloud-scale analytics and AI on Azure,” said Scott Guthrie, executive vice president of cloud and AI at Microsoft.

The $1 billion funding will accelerate Databricks’ ability to scale and support the lakehouse’s rapid adoption, which CEO Ali Ghodsi believes is fuelling its growth. “Built on a modern lakehouse architecture in the cloud, Databricks helps organizations eliminate the cost and complexity that is inherent in legacy data architectures so that data teams can collaborate and innovate faster. This lakehouse paradigm is what’s fueling our growth, and it’s great to see how excited our investors are to be a part of it,” he said. 

Databricks will also be focusing on mergers and acquisitions with machine learning and data start-ups and will work towards democratizing data and AI tools to make them accessible to all.

In the cloud data warehousing space, Databricks competes with Snowflake, which enjoys a 44.9% shareOpens a new window of the market. Other significant players in the field include IBM Data Warehouse, Amazon Redshift, Apache Hive, Oracle Data Warehousing, SAP Data Warehouse Cloud, and Azure Synapse.

See More: StreamSets Extends Partnership With Databricks to Enhance Delta Lake

Databricks offers a unified data platform based on the open-source Apache Spark framework whose adoption has skyrocketed in the past couple of years, boosting its annual revenue from $200 million to $425 million. Recently, the company’s yearly revenue posted a 75% year-over-year growth, which was impressive but fell short of Snowflake’s performance. The market leader boasted a strong showing in Q3, posting a 119% growthOpens a new window in revenue year over year in its fiscal third quarter, which ended on October 31. 

Aside from raising vast sums of money to fund its growth in the cloud warehousing space, Databricks is also moving quickly to close the gap on Snowflake and other competitors. The company recently sweetened its data lake offering by launching SQL AnalyticsOpens a new window , which, the company claimed, enabled organizations to perform all data workloads, including business intelligence (BI) and SQL, on a data lake for the first time. 

The company is also focussing on expanding its presence across continents, doubling its headcount in the UK, Netherlands, Germany, and Sweden, and growing 5x in Australia and India within just 12 months. In September, the company set up new bases in Japan and Germany. Also, it acquired RedashOpens a new window last year to enable data scientists to gather a wide variety of data sources into thematic dashboards for analysis.

With plans to launch an IPO this year, Databricks is following in the footsteps of Snowflake, which raised $1.4 billion before its IPO last year. Snowflake’s shares have since fallen from their peak of $326 in December but the company still boasts an extraordinary $79 billion in market valuation. 

Will the $1 billion fundraising attract the attention of investors ahead of Databricks’ IPO? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!