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Report: Databricks Completes Largest Financing Round Yet, Raising $5 Billion | PYMNTS.com

Jan 14, 2025 - pymnts.com
Databricks has secured $5 billion in debt financing, marking its largest debt raise to date. The funds were sourced from lenders including Blackstone, Apollo Global Management, and Blue Owl Capital, with JPMorgan Chase organizing the fundraise. This financing follows a $10 billion equity funding round in December, which increased Databricks' valuation to $62 billion. The debt structure includes a $2.5 billion revolving credit facility and a $2.25 billion term loan, with an additional $500 million delay-draw tranche. The funds will be used to offset tax burdens from stock sales by employees and are tied to the company's annual recurring revenue, with interest set at 4.5 percentage points over the Secured Overnight Financing Rate.

Databricks, an AI and software company, plans to use the capital from its recent funding to develop new AI products, pursue acquisitions, expand international operations, and provide liquidity for employees. The company is experiencing rapid growth, with over 60% year-over-year increases in recent quarters, driven by rising interest in AI. Databricks' Data Intelligence Platform is designed to help organizations leverage their data for analytics, machine learning, and AI applications. CEO Ali Ghodsi emphasized the company's commitment to delivering long-term value and aiding companies across various industries in building data intelligence.

Key takeaways:

  • Databricks raised $5 billion in debt financing, its largest ever, from lenders including Blackstone, Apollo Global Management, and Blue Owl Capital.
  • The funds will be used to offset tax burdens from stock sales by staffers, following a $10 billion equity funding round in December that valued the company at $62 billion.
  • The debt structure is linked to Databricks' annual recurring revenue and pays 4.5 percentage points over the Secured Overnight Financing Rate.
  • Databricks plans to use its recent funding to develop new AI products, make acquisitions, expand internationally, and provide liquidity for employees.
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