Databricks doubles valuation to $6B in eight months
(Bloomberg) --About eight months after its last funding round, data analytics startup Databricks Inc. said on Tuesday that it has raised $400 million from investors, bringing its funding total to nearly $900 million.
The latest deal values Databricks at $6.2 billion, more than double the $2.75 billion price tag investors gave the company in February. The funding round included existing backers Microsoft Corp. and Andreessen Horowitz, as well as new investors Tiger Global Management, and accounts managed by BlackRock Inc. and T. Rowe Price Group Inc.
Ben Horowitz, an Andreessen Horowitz general partner, praised Databricks Chief Executive Officer Ali Ghodsi: “Ali is the best CEO that I’ve ever worked with,” and added that many companies struggled with making sense of their data. “AI-based insight is extremely difficult,” Horowitz said. “Databricks simplifies it from a performance standpoint that makes it easy and practical.”
Databricks has more than 5,000 customers, including Viacom Inc., HP Inc. and Cisco Systems Inc., Ghodsi said. The startup sells tools aimed at helping those companies organize their data, and uses artificial intelligence to enable them to understand and search for information. Microsoft is both an investor in and a partner of Databricks, and integrates a version of the startup’s software into its cloud product, Microsoft Azure.
Databricks more than doubled its annual recurring revenue over the last year, the company said. If it extrapolated out its most recent quarterly revenue for the next year, annual sales would total more than $200 million. “We’ve had tremendous traction,” Ghodsi said.
The six-year-old San Francisco-based startup plans to use some of its new cash influx on overseas hiring. “The biggest engineering issue we’ve faced in the last two years has been with visas,” Ghodsi said. “It’s been harder to get employees to the United States because of green card issues and visa issues. It’s also been harder to keep our employees here in the U.S.”
In part to address that problem, Databricks will spend about $111 million on its new European Development Center in Amsterdam over the next three years. The company has tripled the size of its engineering team in the Dutch city in the past two years. “What we are finding is it’s easier and less expensive to hire anywhere than in San Francisco,” said Horowitz, who is on the Databricks board. He added that there’s room for expansion in Europe.
On Tuesday, Databricks also announced it had hired Dave Conte as its new chief financial officer. Conte previously spent eight years as the CFO of Splunk Inc., where he helped take the company public.