Databricks Raises $500M In Series I Funding Round, Boosts Valuation To $43 Billion

Chip designer Nvidia joins the list of Databricks investors, evidence of the strategic AI technology development alliance between the two companies.

Databricks has raised $500 million in a Series I funding round that values the fast-growing data and AI platform developer at $43 billion, the company said Thursday.

The funding round, which Databricks said establishes its price per share at $73.50, was led by T. Rowe Price Associates and included GPU chip designer Nvidia as a new investor.

Databricks said the latest funding round comes as the company achieved a revenue run rate of $1.5 billion in its fiscal second quarter (ended July 31), representing 50 percent year-over-year growth.

[Related: Databricks To Acquire Generative AI Startup In $1.3B Deal]

Reports have circulated in recent weeks that Databricks was negotiating a new funding round with global investment management company T. Rowe Price with a possible company valuation of $43 billion.

The San Francisco-based company also said it achieved non-GAAP subscription gross margins of 85 percent in the second quarter and ended the quarter with more than 10,000 global customers including more than 300 with annual spending with Databricks greater than $1 million.

“The commitment from long-term, focused strategic and financial partners reflects Databricks’ continued momentum, the rapid customer adoption of the Databricks Lakehouse, and the success customers are seeing from moving to a unified data and AI platform,” Databricks co-founder and CEO Ali Ghodsi said in a statement.

As for the Nvidia investment, Ghodsi (pictured at the company’s recent Data + AI Summit) said: “Databricks and NVIDIA are building transformative AI technology and we’re excited about the business value and innovation we can bring to our customers.”

“Enterprise data is a goldmine for generative AI,” Jensen Huang, Nvidia founder and CEO, said in the statement. “Databricks is doing incredible work with NVIDIA technology to accelerate data processing and generative AI models.”

Nvidia was among the new Databricks investors in the Series I funding round along with Capital One Ventures and the Ontario Teachers’ Pension Plan. Along with T. Rowe Price, previous investors that participated in the latest round included Andreessen Horowitz, Baillie Gifford, ClearBridge Investments, funds and accounts managed by Counterpoint Global (Morgan Stanley), Fidelity Management & Research Company, Franklin Templeton, GIC, Octahedron Capital and Tiger Global.

“Data and AI have rapidly become the centerpiece of many business strategies. Databricks has not only pioneered the lakehouse category with a world-class team and product, but it is now also at the forefront of generative AI for the enterprise,” said Alan Tu, lead private equity analyst at T. Rowe Price, in a statement. “We’re proud to extend our investment at such a pivotal time for the company, its customers, and the data and AI industry.”

Altogether Databricks has raised some $4 billion in financing since its 2013 founding.

Observers have been anticipating a Databricks IPO for several years. But those plans were put on hold following the stock markets’ slide in 2022 – the worst year for U.S. stocks since 2008. The new funding round could indicate that an IPO is not in the cards for this year.