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February 1, 2021

Databricks Edges Closer to IPO with $1B Round

George Leopold

Lending credence to reports that it’s readying an initial stock offering later this year, Databricks announced the close of a stunning $1 billion funding round, boosting the AI platform vendor’s market valuation north of $28 billion.

The force behind Apache Spark said Monday (Feb. 1) its Series G round was led by new investor Franklin Templeton (NYSE: BEN). Other new investors included the Canada Pension Plan Investment Board, Fidelity Management and Research along with Whale Rock Capital Management.

They were joined by Amazon Web Services (AWS) and Salesforce Ventures.

Previous Databricks investors include Andreessen Horowitz and Microsoft.

Databrick’s attributed investors’ $1 billion vote of confidence to its cloud-based “lakehouse” data architecture that overcomes the limitations of legacy data architectures via its unified data platform. “This lakehouse paradigm is what’s fueling our growth,” Ali Ghodsi, Databricks CEO and co-founder, noted in announcing the funding round.

Ghodsi said the latest cash infusion will be used to further scale Databricks’ lakehouse framework.

The AWS investment accelerates the platform’s shift to the cloud initiated with Microsoft Azure’s version of Databricks. AWS, Microsoft and Salesforce are vying to be among the first to offer an enterprise AI platform. This week’s investment news virtually assures Databricks will be a focus of those efforts.

“Our investment underscores the vision we share with Databricks of simplifying data and AI for our customers,” said Scott Guthrie, Microsoft’s executive vice president for cloud and AI.

Meanwhile, the huge venture round is bound to fuel speculation of a Databricks IPO, perhaps as early as the first half of this year, according to reports. If so, Databricks would build on the success of last fall’s blockbuster stock offering by cloud data warehouse specialist Snowflake (NYSE: SNOW), considered at the time the largest ever software IPO.

San Francisco-based Databricks’ growing list of investors also includes Discovery Capital, Dragoneer Investment Group, Founders Circle Capital, Geodesic, GIC, Green Bay Ventures, Greenoaks Capital, New Enterprise Associates and Octahedron Capital.

Recent items:

Databrick Plotting IPO in 2021, Bloomberg Reports

Will Databricks Build the First Enterprise AI Platform?

Snowflake Pops in ‘Largest Ever’ Software IPO

–Editor’s Note: This story has been updated, correcting the funding round designation.

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