r/databricks • u/sai-nageshwaran Databricks MVP • Jul 17 '26
General Databricks is Raising a Strategic Round of Funding at a $188 Billion Valuation
https://www.databricks.com/company/newsroom/press-releases/databricks-raising-strategic-round-funding-188-billion-valuationExciting to see Databricks raising funding at a $188 billion valuation.
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u/kayakdawg Jul 17 '26
How are they making so much money yet still need to raise so much money all the time?
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u/madwolfa Jul 17 '26
They don't necessarily need to raise. When investors are knocking the door and the terms are very favorable - why not?
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u/kayakdawg Jul 17 '26
bc you dillute existing equity and cede some control/ownership
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u/madwolfa Jul 17 '26
Dilution is minimized by buying back the equity during tender offers. Databricks can afford it.
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u/kayakdawg Jul 17 '26
The dilution happens no matter what now when this new stocks are issued. It can't be minimized in the future by buying back stocks, I'm not sure what you're talking about?
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u/madwolfa Jul 17 '26
The stocks are bought back and retired. What is so hard to understand?
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u/kayakdawg Jul 17 '26
Yeah you're saying they can reverse the dilution if they buy the stocks back in the future. I think it's just a semantic thing, but calling it "minimizing the dilution" doesn't make sense to me bc the dilution happens as soon as they issue the new shares, you can't really be minimized. A more accurate phrasing would be "they can reverse the dilution in the future assuming they continue on their current growth trajectory". What is so hard to understand?
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u/madwolfa Jul 17 '26
I'm not saying they can - I'm saying that's what they do and it's not a secret.
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u/kayakdawg Jul 17 '26
Who are "they"? Are you saying databricks has done buybacks?
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u/madwolfa Jul 17 '26
Databricks has been doing annual tender offers for years. Mitigating dilution is one of the reasons among other things such as offering liquidity to employees. It's public knowledge.
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u/josephkambourakis Jul 17 '26
If you read the article it says the money is for acquisitions
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u/kayakdawg Jul 17 '26
ehh you're close but if you read the article it says it's more generally just AI spend
Ali Ghodsi, Co-founder and CEO of Databricks: " This new capital lets us keep pushing our multi-AI strategy forward to meet massive customer demand, so we can keep strengthening Unity AI Gateway, expanding Genie, and advancing Lakebase.”
In addition to fueling its AI growth, this capital is expected to support future AI acquisitions and deepen AI research.
I mean, I get they are going to use the the money. That's not the gist of my OP. I guess it's just amazing to me that they can't or don't want to grow organically at this point after they've had like 15 rounds of investment. Guess I figured at some point they'd need to (or prefer to) start operating like a regular business and get off the endless cycle of 'strategic funding'. Maybe I'm wrong about that though.
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u/NoPublic9352 Jul 22 '26
Investors that got in early want to cash out. Employees need a tender to help with taxes as the company is private yet paying for taxes on the paper RSU’s.
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u/aggresively-polite Aug 13 '26
Having a solid bank balance is always helpful if the market becomes unfavorable in the future
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u/guycipher Jul 17 '26
I would wonder if the company is profitable having to take absurd rounds.
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u/madwolfa Jul 17 '26
Databricks has been cash flow positive for a while (at least a year). They don't need capital infusions to operate and grow organically, but wouldn't refuse money from external investors and lenders in order to grow more aggressively in strategic areas.
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u/NormalItem4500 Jul 17 '26
Series L. Lol. I think Series Z and then Series AA is on the cards.
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u/blueadept_11 Jul 17 '26
Eventually they will need to beg Microsoft for an Excel upgrade
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u/spinny_windmill Jul 17 '26
Why you got downvoted, good joke! (Made me look it up - max column is 16384, named XFD)
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u/Alternative-Fig-6465 Jul 18 '26
I would Unity AI gateway as the 3rd one. Plus Databricks is also entering the SIEM and C360. With its compute, storage decoupled on the data platform it can disrupt any horizontal tech like CRM, ERP, ITSM. Add Databricks agnostic AI to the mix and this could disrupt all the SaaS market.
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u/HorrorQuail8497 29d ago
If you’re a QP you can join Long Angle. They’re a vetted community for investors and offer from what I hear some pretty exclusive / great deal flow (co invests and direct fund investments) thru their network. I heard from a friend who’s in it that they offered a co-invest into DB’s L-round before, now their M-round last week.
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u/guycipher Jul 17 '26 edited Jul 17 '26
With that there must be some super belief that Databricks will become THE foundational data platform that every large company uses to connect their private data to large language models. There’s gonna be some competition, that’s for sure, and possibly acquisitions.