'It's dumb to IPO this year': Databricks CEO explains why he's waiting to go public | TechCrunch
Dec 18, 2024 - techcrunch.com
Databricks recently secured $10 billion in a significant funding round, with CEO Ali Ghodsi explaining the decision to delay the company's IPO until at least 2025. Ghodsi cited the need for market stability amid concerns about interest rates and inflation, as well as the desire to provide liquidity for employees through the "Series J" funding. Despite the successful IPOs of other companies in 2024, Databricks opted to capitalize on investor interest, initially aiming to raise $3-4 billion but ultimately receiving $19 billion in interest, prompting an increase in share price. Ghodsi emphasized that going public is less critical now than in the past, although it remains a future goal.
Ghodsi also addressed the current "AI bubble," expressing skepticism about the high valuations of some AI startups with minimal products or innovation. He highlighted Databricks' strategic moves, including the acquisition of Tabular for $2 billion, to compete with Snowflake and other major industry players like Salesforce and Microsoft. Ghodsi believes Databricks is well-positioned to leverage the growing importance of data and AI in people's lives.
Key takeaways:
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Databricks raised $10 billion in a significant funding round, with plans to delay its IPO until at least 2025 due to market uncertainties.
The company initially aimed to raise $3 billion to $4 billion, but investor interest surged to $19 billion, prompting an increase in share price.
Databricks acquired a startup called Tabular for $2 billion to compete with Snowflake, despite Tabular having only $1 million in annual recurring revenue.
CEO Ali Ghodsi believes Databricks is well-positioned to compete with larger enterprises like Salesforce and Microsoft, emphasizing the growing importance of data and AI.
