Databricks wants to raise capital on its way to $134 billion valuation

"Databricks is in talks to raise $5 billion (€4.3 billion) at a valuation of $134 billion. That is 32 times the expected revenue of $4.1 billion for this year. This is according to The Information, based on sources. Databricks is said to have already revised its revenue forecasts upwards twice this year. In September, the company raised its forecast from $3.8 billion to $4 billion. Shortly afterwards, another upward correction followed. For the whole of 2024, Databricks expects revenue growth of 55 percent."

"However, the AI focus also presents challenges, the company reportedly told investors. Gross margins are falling from 77 percent to 74 percent. According to sources, this is due to the increased use of AI products. In September, Databricks reached a run rate of $4 billion, with AI products accounting for approximately $1 billion in revenue. The new financing round comes on top of earlier investments this year."

Databricks is pursuing a $5 billion funding round that would value the company at $134 billion, about 32 times the expected $4.1 billion revenue for the year. The company has raised revenue forecasts twice this year and expects 55% revenue growth for 2024. AI products have driven significant revenue, contributing roughly $1 billion to a $4 billion run rate, but increased AI usage has compressed gross margins from 77% to 74%. The planned round follows earlier large investments, including a Series J this year, and comes while the IPO remains postponed amid market volatility.

Read at Techzine Global