The Round Nobody Planned — But Everyone Wanted In On

Ali Ghodsi, co-founder and CEO of Databricks, says the company originally only intended to raise $1 billion — but a report in The Information revealed the fundraise mid-conference in June, at precisely the wrong moment.

"As soon as that article went out, there was a long line of investors that started calling. My phone blew up. It was like the worst timing for us because we were busy with our conference," he said.

When long-term backers are eager and getting turned away risks hard feelings, Databricks made the pragmatic call: issue more stock. In July, the company sent out a press release announcing it had closed a new round at a $188 billion valuation.

Ghodsi says the higher final figure of $190 billion reflects the larger total amount raised and the additional shares issued.

Databricks officially closed the $5 billion funding round on Thursday, with proceeds earmarked for investment in products designed to help businesses build and manage AI agents.

The Investor List Is a Who's Who

The round was led by Coatue and included Blackstone, MGX, and accounts advised by T. Rowe Price, along with new investor Sixth Street Growth. Other new participants included BOND, Clearlake Capital, Point72, Premji Invest, and TPG. Existing investors Andreessen Horowitz, Dragoneer, Goldman Sachs Alternatives, and Thrive Capital, among others, also participated.

About two dozen VCs were named as participants in total.

"They've compressed R&D timelines that used to take years into months, more like a research lab than a typical software company," said Thomas Laffont, Coatue's co-founder.

Revenue Is the Real Story

The valuation alone would be headline-worthy, but Databricks is backing it with serious numbers.

The San Francisco company said it crossed a $7 billion annualized revenue run rate in its second quarter, reflecting more than 80% year-over-year growth.

That's a steep step up from the $134 billion valuation it carried after its December 2024 funding round.

At the time of that prior round, Databricks was tracking roughly $5.4 billion in annualized recurring revenue with 65% growth.

The acceleration to $7 billion in run-rate and greater than 80% growth by Q2 2026 implies a revenue multiple of approximately 27x run-rate at the current valuation — a figure that actually tightens relative to the prior round.

Product-level metrics are also compelling:

  • Lakebase, a serverless Postgres database designed for AI-agent workloads, has already surpassed a $100 million revenue run rate.
  • The Lakehouse data warehousing product reached a $1.5 billion revenue run rate and grew more than 100% year over year.
  • More than 1,000 customers are consuming at over $1 million annual revenue run rate, and over 100 have crossed the $10 million threshold.

The Token Cost Opportunity

Databricks has found itself at the center of the token cost discourse sweeping public markets. Ghodsi says skyrocketing AI costs are boosting demand for the company's AI Gateway platform and open-source tools.

"What has happened is that this token maxing has freaked out the CFOs."

He said that as token expenses rise, clients who once ruled out Chinese AI models are growing more open to them. This is a revealing signal: enterprise buyers are increasingly prioritizing cost efficiency over model provenance — and Databricks sits squarely in the middle of that trade-off as the platform that can route, optimize, and govern those workloads.

Fresh capital will fund Unity AI Gateway, Lakebase, and Genie as Databricks battles competitors including Snowflake, Oracle, and others for the enterprise AI stack.

IPO? Eventually — But Not Soon

Ghodsi also revealed the company is "very unlikely" to IPO before Anthropic or OpenAI.

Databricks is among a growing group of companies that have delayed going public given the myriad of funding opportunities emerging in private markets. "We're not just a company that wants to stay in the private, but right now I just think there would be too much distraction in the public market," Ghodsi said.

For founders and operators watching the private market, Databricks' raise is a data point about the current moment: with Lovable closing a $400M Series C at a $13.3B valuation and Cognition in talks at a $40B valuation, investor appetite for AI infrastructure is clearly far outpacing what founders are even asking for.

Databricks now represents the second major financing round this year for one of the fastest-growing software firms competing against Snowflake and Alphabet. The message to the market: if you have the revenue to back it up, leaving money on the table may be the only hard part.