Databricks closes in on multibillion funding round at $55 billion valuation to help employees cash out

cnbc.com:

One of the world's most valuable private tech companies is raising billions more in cash and is in no rush to go public, sources told CNBC. 

San Francisco-based Databricks is raising at least another $5 billion in its latest funding round — though it could raise up to $8 billion given the round is ongoing — according to several sources who asked not to be named because the discussions were private. The latest raise would value the company at $55 billion and could top the largest round of the year by OpenAI.

The latest funding is designed to help Databricks employees sell shares, a source said. Reducing pressure from employees to cash out also reduces the need for a liquidity event like an IPO. One source said the funding round makes Databricks' highly anticipated public debut less urgent. But it could still happen in the back half of next year.

Databricks was founded in 2013 and sells software that helps enterprises organize data, and build their own generative AI products. It uses machine learning to help clients from AT&T to Walgreens parse through and make sense of massive troves of data. 

This equity round could be the largest in a banner year for artificial intelligence funding. One in three venture dollars this year has gone to an AI startup, according to CB Insights. OpenAI holds the record in 2024, raising $6.6 billion in October at a $157 valuation.

Databricks last raised $500 million at a $43 billion valuation. It's backed by Nvidia, Capital One, Andreessen Horowitz, Baillie Gifford, Fidelity, Insight Partners, Tiger Global and others. 

The Information first reported that Databricks was raising money.

The firm has capitalized on the momentum in artificial intelligence. This summer, it acquired MosaicML, a $1.3