Home / Business and Economy / Databricks opts for private markets over IPO
Databricks opts for private markets over IPO
18 Jun
Summary
- Databricks plans to raise private capital at up to $175 billion.
- CEO Ali Ghodsi believes 2026 is a terrible year to list.
- The company's valuation would jump 30% from its December raise.
Databricks has decided to bypass the public markets for now, planning to secure private funding at a valuation of up to $175 billion. CEO Ali Ghodsi has stated that 2026 is an unsuitable year for the company to pursue an initial public offering (IPO).
The company aims to raise capital privately at a valuation of $165 billion to $175 billion, a potential 30% increase from its last funding round in December. This move allows Databricks to capitalize on available private investment, especially as major AI companies like SpaceX, Anthropic, and OpenAI prepare for public listings.
This strategy also helps Databricks distance itself from competitor Snowflake. While Databricks is growing at twice the rate of Snowflake and has a much higher valuation multiple, both companies offer similar products. Snowflake’s stock performance has been sluggish, suggesting investor caution towards subscription-based businesses in the AI sector.
Databricks has been preparing for a potential IPO since at least 2021. However, by choosing private funding, the company can leverage a challenging private market by securing significant investment and potentially widening the gap with its main competitor.
