Databricks grows rapidly and raises over four billion US dollars

The data and AI company Databricks is continuing to grow at a rapid pace. According to the company, Databricks has grown by more than 55 percent compared to the previous year and achieved an annualized revenue rate of over 4.8 billion US dollars in the third quarter. In parallel, the company closed a Series L financing round of more than four billion US dollars, valuing Databricks at 134 billion US dollars.

The round is one of the largest private financings in recent years and is led by Insight Partners, Fidelity Management & Research Company and J.P. Morgan Asset Management. Other investors include Andreessen Horowitz, BlackRock, Blackstone, Coatue, GIC, NEA, Temasek and Thrive Capital.

Impressive growth, but no guarantee of profits

By European standards, the key figures reported are exceptional. Turnover of several billion dollars, high growth rates and a valuation in the three-digit billion range are rare in this country. Nevertheless, these figures only provide a limited indication of the company's long-term earning power.

Although Databricks has reported a positive free cash flow for the past twelve months, this does not equate to sustainable profitability in the traditional sense. High investments in product development, infrastructure and personnel can continue to have a negative impact on the earnings situation, particularly for fast-growing technology companies. The current financing round therefore primarily underlines investors' confidence in the long-term market potential rather than a phase of economic maturity that has already been completed.

Billions in revenue from AI and data warehousing

Databricks is benefiting from the increasing importance of data-driven applications and generative AI in companies. According to its own figures, the company now generates over one billion US dollars in revenue from its traditional data warehousing business and from AI products.

Other key figures include a net customer retention rate of over 140 percent and more than 700 customers with an annual turnover rate of over one million US dollars. More than 20,000 organizations worldwide, including adidas, Bayer, Mastercard and over 60 percent of Fortune 500 companies, rely on the platform.

Focus on data-intelligent applications and AI agents

Databricks intends to use the fresh capital to further expand three strategic product areas in particular. These include Lakebase, a serverless Postgres database designed for AI applications. According to Databricks, the product has gained thousands of customers in just a few months and is growing faster than the established data warehousing offering.

The company is also investing in Databricks Apps, a development and deployment environment for data and AI applications, and in Agent Bricks, which is designed to help companies build and operate complex AI agents based on their own data. The aim is to provide companies with an end-to-end infrastructure for so-called data-intelligent applications.

Capital also for employee liquidity and acquisitions

In addition to product development, part of the financing round will also be used to provide liquidity for employees. Databricks also plans to use the capital for strategic AI acquisitions and to expand its own research.

The financing round underlines the company's ambition to play a central role in the global market for data and AI infrastructure. However, whether Databricks will be able to translate its strong growth into stable profits in the medium term remains one of the key questions for the next phase of the company's development.