Databricks closes $5 billion funding at $190 billion valuation

Databricks closed a $5 billion funding round at a $190 billion valuation, CNBC reported Thursday. For investors tracking the private AI market, the deal shows how sharply the company’s transaction value has risen in six months, while Databricks remains privately held.

The $190 billion figure is $56 billion above the $134 billion valuation attached to Databricks’ prior completed equity round in February, an increase of about 42%. A private-round valuation is the price investors agree to in a financing, rather than a public company’s market capitalization, which changes with its traded share price.

Databricks said it had passed a $7 billion revenue run rate, an annualized estimate based on its current sales pace, and that revenue grew more than 80% year over year in its second quarter. Those are company-reported operating measures, not audited financial results cited in the reporting.

How did Databricks reach a $190 billion valuation?

The completed deal follows a July 16 announcement in which Databricks said it had signed a term sheet for a strategic round at a $188 billion valuation and expected to close later in the summer. Coatue, an existing investor, was identified then as the planned lead, with other new and existing investors expected to participate.

Forbes reported that the final valuation reached $190 billion because the company raised a larger amount and issued additional shares, citing co-founder and CEO Ali Ghodsi. CNBC reported that Coatue, Blackstone, MGX, T. Rowe Price and Sixth Street Growth led the completed round. Forbes reported that Sixth Street Growth joined as a new investor.

• February: Databricks raised $5 billion in equity and secured $2 billion in new debt capacity at a $134 billion valuation, CNBC reported.

• July 16: The company announced a signed term sheet at an $188 billion valuation, with a close expected later in the summer.

• August 13: CNBC and Forbes reported the $5 billion round had closed at a $190 billion valuation.

What will Databricks use the money for?

Databricks said the capital will support its enterprise AI strategy, including Unity AI Gateway, Genie and Lakebase. The company describes Unity AI Gateway as a tool for governing AI use and costs, Genie as a tool that draws on business data to provide answers and actions, and Lakebase as a serverless Postgres database designed for AI agents.

In its July announcement, Databricks also said the funding was expected to back future AI acquisitions and research. The San Francisco company, founded in 2013, helps customers build AI applications and agents using their own data, according to CNBC.

The earlier financing came with different reported operating metrics. In February, Databricks said annualized revenue had exceeded $5.4 billion in the January quarter, up 65% from a year earlier, and that it had generated free cash flow over the preceding year, CNBC reported. The company has not announced a timetable for an initial public offering; Ghodsi told CNBC in February that it would go public when the time was right.

This story draws on original reporting from CNBC.