Regardless of the product and idea they had, a company that is 15 years old and raised 10+ billion dollars still needing to raise money after all this time is ridiculous.
Not being sustainable after all this time and billions of dollars is a sign company is just burning money, and a lot of it. wework vibes.
This. To me if you are still unprofitable after 15 years you are not really a business.
However genuinely curious about the thesis applied by the VC’s/Funds that invest in such a late stage round? Is it simply they are taking a chance that they won’t be the last person holding the potato? Like they will get out in series L or M rounds or the company may IPO by then. Either ways they will make a small return? Or is the calculus diff?
They were expecting to be cash flow positive in Jan 2025, according to [0]. That said, it is hard to tell if they actually became cash flow positive since with them still being a private company, they aren't required to release that information.
Whenever companies release glowing fluff PR about their amazing financials they key word in there is “non-GAAP.”
i.e. when we exclude a bunch of pesky costs and other expenses that are the reason we’re not doing so well, we’re actually doing really well!
Non-GAAP has its place, but if used to say the company is doing well (vs like actual accounting) that’s usually not a good sign. Real healthy companies don’t need to hide behind non-GAAP.
This! We did some simple testing on their platform to integrate it into our product for a customer. In a few days of light work rang up a huge bill. Many multiples of what we spend on OpenAI, which gets heavy use.
it really is the most expensive I've ever came across. It would be a flatout no-go if it weren't for Microsoft pushing everyone onto this platform, supported by their network of really absolutely neutral Gartner friends and Deloittes/KPMG/Accenture/TCS "experts" to recommend what lines their pockets.
It doesn't look like a typical round for raising capital for investments. Instead:
1. Liquidity: Early investors could sell to late-stage investors, since they are not IPO. Their previous round looked like that.
2. Markup: The previous investors can increase their valuation by doing a round again. It also provides a paper valuation for acquiring new companies. That combined with preferred stock (always get 1x back) might be appealing and make some investors more generous on valuation.
Looks like someone is thinking “hey let’s wave our hands in the air and talk about AI and someone will write us a cheque!” as a way to kick the can down the road that this far into it they’re still not selling a product that’s making money. Looks a bit desperate TBH.
Their product looks like basic wrappers for managing postgres instances and dashboards. Why would anyone with even minimal technical expertise pay for a generic service like that?
Definitely seem like bad investments from my perspective on databricks.
Databricks is great at offering a "distributed spark/kubernetes in a box" platform. But its AI integration is one of the least helpful I've experienced. It's very interuptive to a workflow, and very rarely offers genuinely useful help. Most users I've seen turn it off, something databricks must be aware of because they require admins permission for users to opt out of AI.
I don't mean to rant, there's lots that is useful in databricks, but it doesn't seem like this funding round is targeting any of that.
i don't think that it is possible to raise a 100 billion without name dropping ai in every sentence in every meeting you have with a potential investor....
What’s the obvious rationale for going through the whole alphabet of funding rounds, instead of going public / IPO after «the usual» number of raising money.
Wouldn’t the current strategy result in some serious stock dilution for the early investors?
Investors put 10 billion in in a previous round; that's a lot. Somehow, more is needed now. 100M is just 1% of that. So it's not going to massively move the needle. But it does raise the question where all that cash is going.
My guess is that they might be about to embark on a shopping spree and acquire some more VC backed companies. They've actually bought quite a few companies already in the past few years. And they would need cash to buy more. The company itself seems healthy and generating revenue. So, it shouldn't strictly need a lot of extra capital. Acquisitions would be the exception. You can either do that via share swaps or cash. And of course cash would mostly go to the VCs backing the acquired companies. Which is an interesting way to liquidate investments. I would not be surprised to learn that there's a large overlap with the groups of VCs of those companies and those backing databricks. 100M$ on top of 10B sounds like somebody wants in on that action.
As a financial construction it's a bit shady of course. VCs are using money from big institutional investors to artificially inflate one of their companies so that it can create exits for some of their other investments via acquisitions financed with more investment. It creates a steady stream of "successes". But it sounds a bit like a pyramid game. At some point the big company will have to deliver some value. I assume the hope is some gigantic IPO here to offload the whole construction to the stock market.
Stock dilution doesn't work like that. If a seed investor invests for 5% at a $10mil valuation, and the company goes 10x (ie. a valuation of $100mil), if the company now raises a $100mil Series K, that means the Series K investor owns 50% of the company, and the seed investor got diluted down to 2.5%. However, the new valuation of the company is now $200mil with the cash that the new investor brought in, effectively making the seed investor's investment worth the same.
It's a smaller piece of a bigger pie.
To answer your question, the right question to ask is why go public when you can remain private? Public means more paperwork, more legalese, more scrutiny, and less control for the founder, and all of that only to get a bit more liquidity for your stock. If you can remain private, there really isn't much of a reason to not do that.
An IPO means selling a whole bunch of people, whereas fundraising rounds pre-IPO mean courting a small number of large investors. I think it's partly a sign of the times that there's enough concentrated capital that you can get enough money from private hands to not need to go the IPO route yet.
The private market is getting out of hand, then. I think it makes sense for private companies beyond a certain size to have the same reporting requirements that listed ones do. At these valuations the private market for startups is becoming systemically important.
To some degree, they do -- under SEC rules (Exchange Act §12(g)), private companies with >$10M in assets and 2,000+ shareholders (or 500+ non-accredited investors) have to start public-style reporting.
I assume there's some clever accounting to ensure they're not at the 2,000 shareholder cap (perhaps double-trigger RSUs don't count as being a shareholder yet?)
This heavily depends on share classes and preferences. Surely the new investor wants better terms. The issue isn't so much dilution as a preference but added risk of never even getting a payout at all.
An order of magnitude less scrutiny, but also an order of magnitude in size of investor base. The private markets trade at Palantir levels so why go public. Also the private markets are now routinely doing secondary transactions so even less reason to go public.
In India, Zomato[0] (now listed) and Swiggy[1] both had a Series K. SpaceX has only gotten to a Series J, but they've done some secondary sales since. Apparently, Palantir[2] has had a Series K as well, back in 2015.
To be honest, I completely lost the sense of scale with money in general. It all feels like Zimbabwe dollars to me. The news talking billions and trillions. Meanwhile friends who used to be well-off (in US/UK/EU) struggle with mortgage payments and/or bills. And the ones not laid off are expected to grind 10hs per day to keep their jobs.
Why Databricks would do this (rather than IPO) is obvious. When you can raise privately, it’s way easier than IPO. The real question to me is why the investors (new and previous) are going along with it?
You'd think previous investors would want some actual liquidity though at some point. The early investors have had plenty of chances now but surely not everyone's been able to cash out. But hey, they have lots of funny money now I guess?
I don't think there is anything out there that really bundles everything exactly like databricks does.
There are better storage solutions, better compute and better AI/ML platforms, but once you start with databricks, you dig yourself a hole because the replacing it is hard because it has such a specific subset of features across multiple domains.
In our multinational environment, we have a few companies that are on different tech stacks (result of M&A). I can say Snowflake can do a lot of the things Databricks does, but not everything. Teradata is also great and somehow not gaining a lot of traction. But they are near impossible to get into as a startup, which does not attract new talent to give it a go.
On the ML side, Dataiku and Datarobot are great.
Tools like Talend, snaplogic, fivetran are also really good at replacing parts of databricks.
So you see, there are better alternatives for sure, cheaper at the same time too, but there is no drop-in replacement I can think of
Depends on how you define cheaper - you could set up Apache Iceberg, Spark, MLFlow, AirFlow, JupyterLab, etc and create an abomination that sort of looks like Databricks if you squint, but then you have to deal with set up, maintenance, support, etc.
Computationally speaking - again depends on what your company does - Collect a lot of data? You need a lot of storage.
Train ML Models, you will need GPUs - and you need to think about how to utilise those GPUs.
Or...you could pay databricks, log in and start working.
I worked at a company who tried to roll their own, and they wasted about a year to do it, and it was flaky as hell and fell apart. Self hosting makes sense if you have the people to manage it, but the vast majority of medium sized companies will have engineers who think they can manage this, try it, fail and move on to another company.
Don't worry, most places go straight with databricks and get a flaky as hell system that falls apart anyway, but then they can blame databricks instead of their own incompetence.
yeah where IT blocks half of the config, and you disable half of the features that could make it great, just to make sure they definitely don't give control to..GASP... A DATA ENGINEER
Exasol costs us a fraction of what we used to pay for Databricks, and that is even with us serving far more users than we used to do (from a data size perspective we are not at the petabytes scale yet, but getting there).
This curvature of spacetime is caused by the mass of the AI bubble.
While many comments were focused on the "K" letter, I wanted to remind us all that OpenAI stretched their Series E from Jan 23, 2023 to Nov 22, 2024
-- 23 months, squeezing in 6 rounds
I'm as skeptical as anyone, but have you ever heard of companies like Oracle, which got rich off a database or Snowflake (current market cap 65B)? Companies pay oodles of money for that capabilities.
because it's recommended by nearly all consultants and Microsoft.
Simple as that, it's consulting Heaven. Much like SAS and SAP. Everybody happy.
Now to be far to databricks, if used properly and ignore the cost, it does actually function pretty well. Compared to Synapse, PowerBI Tabular, Fabric, Azure ML, ... that's already a big big big step forward.
Since this year the employees are vesting RSUs (not options, and also no expiry date) quorterly now, they sell a portion of them (automatically) and pay taxes to the government at each vesting event, as the expiry date no longer exists. For liquidity there are tenders where employees sell their stock privately, so the employees no longer need IPO to cash out.
Just to clarify - for many years employees were getting the RSUs not options, just with the expiratation date attached - which is gone since this year.
Options can a significant portion of sign on bonus but they typically vest over several years so I guess they are hoping for an IPO eventually. IMHO Databricks will be overtaken by "events" including AI disillusionment, broader open source tools and broader education across the workforce. So the eventual IPO will not happen.
Depends. Some options only vest in the case of an "exit event", i.e. an acquisition or an IPO. At this point I would assume such options are borderline worthless.
Yeah I think this is how it usually works, and yeah at $100bn valuation they are now 100% worthless, because investors get paid first, and there's no way they'll get sold or IPO for more than $100bn.
> Yeah I think this is how it usually works, and yeah at $100bn valuation they are now 100% worthless, because investors get paid first, and there's no way they'll get sold or IPO for more than $100bn.
Not quite right? Because the raise-implied valuation doesnt account for preferences. The IPO could be for 50bn and the latest investors could do well given the preference stack of first money outs in later rounds.
Databricks on azure is huge. I've heard that in some Azure regions, over 70% of the compute usage is just Databricks. So there is definitely an incentive for MS to acquire them.
Except that Microsoft looks better if you have the illusion of choice. Azure Databricks or Azure Databricks but you have to build it yourself out of janky azure services
I always struggled to understand how do you make a company adopt a platform like databricks to « manage data » isnt managing data a minefield with plenty of open source pieces of software that serve different purposes ? who is the typical databricks customer?
you kill off all open source pieces, in turn compliance is happy, and a CTO is happy because he has a maintenance contract and can blame other people if stuff goes wrong.
It's a way to get those pesky Python people to shut up
Oh, and a CTO is always valued more if he manages a 5 million Databricks budget, where he can prove his worth by showing a 5% discount het negotiated very well, than a 1 million whatever-else budget that would be best in class. Everybody wins.
I think that's the main offering of databricks- you get a "data platforn in a box" and navigating the forest of piecemeal solutions is replaced with telling your data science and analytics teams to "use databricks".
It's easy to look on knowing lots about data tools and say "this could be better done with open source tools for a fraction of the cost", but if you're not a big tech company, hiring a team to manage your data platform for 5 analysts is probably a lot more expensive than just buying databricks.
We have a large postgres server running on a dedicated server that handles millions of users, billions of record updates and inserts per day, and when I want to run an analysis I just open up psql. I wrote some dashboards and alerting in python that took a few hours to spin up. If we ever ran into load issues, we'd just set up some basic replication. It's all very simple and can easily scale further.
$2-3B in 2024 revenue based on estimates I can find. That’s a 33-50x revenue multiple lol.
Regardless of the product and idea they had, a company that is 15 years old and raised 10+ billion dollars still needing to raise money after all this time is ridiculous.
Not being sustainable after all this time and billions of dollars is a sign company is just burning money, and a lot of it. wework vibes.
This. To me if you are still unprofitable after 15 years you are not really a business.
However genuinely curious about the thesis applied by the VC’s/Funds that invest in such a late stage round? Is it simply they are taking a chance that they won’t be the last person holding the potato? Like they will get out in series L or M rounds or the company may IPO by then. Either ways they will make a small return? Or is the calculus diff?
They were expecting to be cash flow positive in Jan 2025, according to [0]. That said, it is hard to tell if they actually became cash flow positive since with them still being a private company, they aren't required to release that information.
[0]: https://www.databricks.com/company/newsroom/press-releases/d...
Whenever companies release glowing fluff PR about their amazing financials they key word in there is “non-GAAP.”
i.e. when we exclude a bunch of pesky costs and other expenses that are the reason we’re not doing so well, we’re actually doing really well!
Non-GAAP has its place, but if used to say the company is doing well (vs like actual accounting) that’s usually not a good sign. Real healthy companies don’t need to hide behind non-GAAP.
Even more if you are familiar with their pricing.
This! We did some simple testing on their platform to integrate it into our product for a customer. In a few days of light work rang up a huge bill. Many multiples of what we spend on OpenAI, which gets heavy use.
Granted, OpenAI is burning tons of cash as well. The great tech race of cash burning is at full steam!
It does have some good aspects for engineers working with these tools in some cases: https://ludic.mataroa.blog/blog/i-accidentally-saved-half-a-...
Its unfair to compare Databricks to OpenAI because they're at very different points in the enshittification[1] process.
OpenAI is still early, burning VC money to acquire customers by operating at a loss. This makes it appear cheap.
DataBricks is further along, attempting to claw back the value they provided to customers by raising prices.
[1] https://en.wikipedia.org/wiki/Enshittification
Them and Snowflake have been in an acquisition race, gobbling up data engineering startups like Pac-Man.
That costs a fair bit of dosh.
Is this just a case of waiting to stay private while still giving current employees some liquidity?
Do we know that they need to raise and are not sustainable? I don't think them raising is evidence of either.
At least it is not unprecedented. Palantir raised a series I in 2020 after 17 years of operation.
It feels like they may have got market share using low costs and this has led to this situation.
The costs of using Databricks are anything but low, though.
True, but it can still be lower than alternatives or lower than the cost to provide.
it really is the most expensive I've ever came across. It would be a flatout no-go if it weren't for Microsoft pushing everyone onto this platform, supported by their network of really absolutely neutral Gartner friends and Deloittes/KPMG/Accenture/TCS "experts" to recommend what lines their pockets.
It doesn't look like a typical round for raising capital for investments. Instead:
1. Liquidity: Early investors could sell to late-stage investors, since they are not IPO. Their previous round looked like that.
2. Markup: The previous investors can increase their valuation by doing a round again. It also provides a paper valuation for acquiring new companies. That combined with preferred stock (always get 1x back) might be appealing and make some investors more generous on valuation.
Looks like someone is thinking “hey let’s wave our hands in the air and talk about AI and someone will write us a cheque!” as a way to kick the can down the road that this far into it they’re still not selling a product that’s making money. Looks a bit desperate TBH.
yep i still don't understand how hosting notebooks and spark ( which btw is ancient big data tech) is worth 100B.
whats so hard about this. i don't get it.
How is this company worth even 1% of that?
Their product looks like basic wrappers for managing postgres instances and dashboards. Why would anyone with even minimal technical expertise pay for a generic service like that?
I can’t help feeling it is the first major misstep from databricks , they are raising the money for their hosted Postgres and ai platform.
Ai is not far away from dropping to the “trough of disillusionment” and I can’t see why databricks even needs Postgres.
Hopefully I’m wrong as I’m a big fan of databricks.
Definitely seem like bad investments from my perspective on databricks.
Databricks is great at offering a "distributed spark/kubernetes in a box" platform. But its AI integration is one of the least helpful I've experienced. It's very interuptive to a workflow, and very rarely offers genuinely useful help. Most users I've seen turn it off, something databricks must be aware of because they require admins permission for users to opt out of AI.
I don't mean to rant, there's lots that is useful in databricks, but it doesn't seem like this funding round is targeting any of that.
Yeah doesn’t seem like core functionality
Everybody wants a pie in that AI bubble, whether it sticks or not, and that's a bad thing for companies' long term vision.
It might come down like the dotcom bubble like fallout when this thing bursts.
i don't think that it is possible to raise a 100 billion without name dropping ai in every sentence in every meeting you have with a potential investor....
They are not raising $100B, they are raising money at a valuation of $100B.
This fucker Ghodsi will do everything but go public
then he'll really have come clean
What’s the obvious rationale for going through the whole alphabet of funding rounds, instead of going public / IPO after «the usual» number of raising money.
Wouldn’t the current strategy result in some serious stock dilution for the early investors?
Investors put 10 billion in in a previous round; that's a lot. Somehow, more is needed now. 100M is just 1% of that. So it's not going to massively move the needle. But it does raise the question where all that cash is going.
My guess is that they might be about to embark on a shopping spree and acquire some more VC backed companies. They've actually bought quite a few companies already in the past few years. And they would need cash to buy more. The company itself seems healthy and generating revenue. So, it shouldn't strictly need a lot of extra capital. Acquisitions would be the exception. You can either do that via share swaps or cash. And of course cash would mostly go to the VCs backing the acquired companies. Which is an interesting way to liquidate investments. I would not be surprised to learn that there's a large overlap with the groups of VCs of those companies and those backing databricks. 100M$ on top of 10B sounds like somebody wants in on that action.
As a financial construction it's a bit shady of course. VCs are using money from big institutional investors to artificially inflate one of their companies so that it can create exits for some of their other investments via acquisitions financed with more investment. It creates a steady stream of "successes". But it sounds a bit like a pyramid game. At some point the big company will have to deliver some value. I assume the hope is some gigantic IPO here to offload the whole construction to the stock market.
Where did you get the 100M figure from?
Because they don't want the public market to put a real valuation on the company, when they can still raise money with a made up valuation.
Stock dilution doesn't work like that. If a seed investor invests for 5% at a $10mil valuation, and the company goes 10x (ie. a valuation of $100mil), if the company now raises a $100mil Series K, that means the Series K investor owns 50% of the company, and the seed investor got diluted down to 2.5%. However, the new valuation of the company is now $200mil with the cash that the new investor brought in, effectively making the seed investor's investment worth the same.
It's a smaller piece of a bigger pie.
To answer your question, the right question to ask is why go public when you can remain private? Public means more paperwork, more legalese, more scrutiny, and less control for the founder, and all of that only to get a bit more liquidity for your stock. If you can remain private, there really isn't much of a reason to not do that.
An IPO means selling a whole bunch of people, whereas fundraising rounds pre-IPO mean courting a small number of large investors. I think it's partly a sign of the times that there's enough concentrated capital that you can get enough money from private hands to not need to go the IPO route yet.
The private market is getting out of hand, then. I think it makes sense for private companies beyond a certain size to have the same reporting requirements that listed ones do. At these valuations the private market for startups is becoming systemically important.
To some degree, they do -- under SEC rules (Exchange Act §12(g)), private companies with >$10M in assets and 2,000+ shareholders (or 500+ non-accredited investors) have to start public-style reporting. I assume there's some clever accounting to ensure they're not at the 2,000 shareholder cap (perhaps double-trigger RSUs don't count as being a shareholder yet?)
This heavily depends on share classes and preferences. Surely the new investor wants better terms. The issue isn't so much dilution as a preference but added risk of never even getting a payout at all.
> If you can remain private, there really isn't much of a reason to not do that.
With the exception of founders it's better for literally everybody else, more scrutiny, more pressure on c-corp, more liquidity, etc.
A new round is easier than IPO. Especially when the IPO outcome is not necessarily positive.
An order of magnitude less scrutiny, but also an order of magnitude in size of investor base. The private markets trade at Palantir levels so why go public. Also the private markets are now routinely doing secondary transactions so even less reason to go public.
If the private markets can offer you the liquidity you need on your terms, then why subject yourself to the scrutiny of the public markets?
Plus the markets are in a weird state right now.
IPO needs real numbers, VCs just want buzzwords
I’ve never seen a Series K before. I wonder how their cap table looks like.
In India, Zomato[0] (now listed) and Swiggy[1] both had a Series K. SpaceX has only gotten to a Series J, but they've done some secondary sales since. Apparently, Palantir[2] has had a Series K as well, back in 2015.
[0]: https://appedus.com/indias-zomato-raised-500-million-in-seri...
[1]: https://techcrunch.com/2022/01/24/indian-food-delivery-giant...
[2]: https://www.finsmes.com/2015/12/palantir-technologies-raises...
Technically speaking - "FUCKED"
> and Lakebase, a new type of operational database (OLTP), built on open source Postgres, and optimized for AI Agents.
Rust + Cloud Object Store/serverless/S3 + Postgres. Slap "AI agents" on top: keyword peak reached. So they will easily raise the 100bn.
Meanwhile, this is Lakebase/Neon: https://blog.opensecret.cloud/why-we-migrated-from-neon-to-p...
Due diligence? Taboo.
They’re not raising $100b. They’re raising _at_ $100b.
I stand corrected.
To be honest, I completely lost the sense of scale with money in general. It all feels like Zimbabwe dollars to me. The news talking billions and trillions. Meanwhile friends who used to be well-off (in US/UK/EU) struggle with mortgage payments and/or bills. And the ones not laid off are expected to grind 10hs per day to keep their jobs.
https://en.wikipedia.org/wiki/HyperNormalisation
https://www.theguardian.com/wellness/ng-interactive/2025/may...
Why Databricks would do this (rather than IPO) is obvious. When you can raise privately, it’s way easier than IPO. The real question to me is why the investors (new and previous) are going along with it?
Because it is a better valuation than what they would get in the public markets with an IPO?
You'd think previous investors would want some actual liquidity though at some point. The early investors have had plenty of chances now but surely not everyone's been able to cash out. But hey, they have lots of funny money now I guess?
If they’re not profitable by now watch Oracle just buy them in the future and that’ll be that.
Prediction for 2026 - investors will be shitting bricks.
> Series K
I never seen such invertment round. aren't you supposed to stop at C or D? .. or at least at some point?
Yes, they need to stop at Z.
tripple AAA
Are there any cheaper alternatives to Databricks, EC2, DynamoDB, S3 solution? Where cost is more predictable and controlled?
What's a good roll your own solution? DB storage doesn't need to be dynamic like with DynamoDB. At max 1TB - maybe double in the future.
Could this be done on a mid size VPS (32GB RAM) hosting Apache Spark etc - or better to have a couple?
P.S. total beginner in this space, hence the (naive) question.
I don't think there is anything out there that really bundles everything exactly like databricks does.
There are better storage solutions, better compute and better AI/ML platforms, but once you start with databricks, you dig yourself a hole because the replacing it is hard because it has such a specific subset of features across multiple domains.
In our multinational environment, we have a few companies that are on different tech stacks (result of M&A). I can say Snowflake can do a lot of the things Databricks does, but not everything. Teradata is also great and somehow not gaining a lot of traction. But they are near impossible to get into as a startup, which does not attract new talent to give it a go.
On the ML side, Dataiku and Datarobot are great.
Tools like Talend, snaplogic, fivetran are also really good at replacing parts of databricks.
So you see, there are better alternatives for sure, cheaper at the same time too, but there is no drop-in replacement I can think of
Depends on how you define cheaper - you could set up Apache Iceberg, Spark, MLFlow, AirFlow, JupyterLab, etc and create an abomination that sort of looks like Databricks if you squint, but then you have to deal with set up, maintenance, support, etc.
Computationally speaking - again depends on what your company does - Collect a lot of data? You need a lot of storage.
Train ML Models, you will need GPUs - and you need to think about how to utilise those GPUs.
Or...you could pay databricks, log in and start working.
I worked at a company who tried to roll their own, and they wasted about a year to do it, and it was flaky as hell and fell apart. Self hosting makes sense if you have the people to manage it, but the vast majority of medium sized companies will have engineers who think they can manage this, try it, fail and move on to another company.
Don't worry, most places go straight with databricks and get a flaky as hell system that falls apart anyway, but then they can blame databricks instead of their own incompetence.
yeah where IT blocks half of the config, and you disable half of the features that could make it great, just to make sure they definitely don't give control to..GASP... A DATA ENGINEER
To be fair, the Data Engineer is probably either a data analyst turned DBA who yearns for the comfort of SQL Server or worse, the lowest bidder.
For a few TBs of data, well partitioned and stored in parquet or some such format, you could just use duckdb on a single node.
Exasol costs us a fraction of what we used to pay for Databricks, and that is even with us serving far more users than we used to do (from a data size perspective we are not at the petabytes scale yet, but getting there).
Self host on Hetzner, it will save you time, money and troubles.
This curvature of spacetime is caused by the mass of the AI bubble.
While many comments were focused on the "K" letter, I wanted to remind us all that OpenAI stretched their Series E from Jan 23, 2023 to Nov 22, 2024 -- 23 months, squeezing in 6 rounds
source: https://tracxn.com/d/companies/openai/__kElhSG7uVGeFk1i71Co9...
lol analytics platform that no one outside the industry has heard of valued at $100B.
just keep rolling out those fundraising rounds and kick the can down the road.
I'm as skeptical as anyone, but have you ever heard of companies like Oracle, which got rich off a database or Snowflake (current market cap 65B)? Companies pay oodles of money for that capabilities.
oracle succeeded because of its lobbyists and sales contacts, so much so that they spun out into another multi billion $ org
I’d imagine pretty much all of the s and p 500 companies rely on databricks, a large percentage of them at least
for what? managed postgres and some ml training tools?
because it's recommended by nearly all consultants and Microsoft.
Simple as that, it's consulting Heaven. Much like SAS and SAP. Everybody happy. Now to be far to databricks, if used properly and ignore the cost, it does actually function pretty well. Compared to Synapse, PowerBI Tabular, Fabric, Azure ML, ... that's already a big big big step forward.
Databricks is janky, but so much better than the Azure services for data.
If you're buying from microsoft, it won't be cheap either way, might as well treat yourself a little bit.
Spark
If they run out of letters, will they eventually raise a series AA?
Imagine the funding they get 10 years later when they finally do a AAA round.
/s
wonder what they employees think. will they ever IPO and cashout?
I've heard they're regularly doing buybacks for employees.
If their options haven't converted to stock yet, it's not looking good. This is the sort of shenanigans that demand a strike. And ideally regulation.
Since this year the employees are vesting RSUs (not options, and also no expiry date) quorterly now, they sell a portion of them (automatically) and pay taxes to the government at each vesting event, as the expiry date no longer exists. For liquidity there are tenders where employees sell their stock privately, so the employees no longer need IPO to cash out.
Just to clarify - for many years employees were getting the RSUs not options, just with the expiratation date attached - which is gone since this year.
So what happened to employees who had RSUs with expirations that have passed? Do they lose the value? I know my startup stock had 10yr expirations.
It didn’t happen as they were careful to make a tender before expiration hit anyone.
Options can a significant portion of sign on bonus but they typically vest over several years so I guess they are hoping for an IPO eventually. IMHO Databricks will be overtaken by "events" including AI disillusionment, broader open source tools and broader education across the workforce. So the eventual IPO will not happen.
Depends. Some options only vest in the case of an "exit event", i.e. an acquisition or an IPO. At this point I would assume such options are borderline worthless.
Yeah I think this is how it usually works, and yeah at $100bn valuation they are now 100% worthless, because investors get paid first, and there's no way they'll get sold or IPO for more than $100bn.
> Yeah I think this is how it usually works, and yeah at $100bn valuation they are now 100% worthless, because investors get paid first, and there's no way they'll get sold or IPO for more than $100bn.
Not quite right? Because the raise-implied valuation doesnt account for preferences. The IPO could be for 50bn and the latest investors could do well given the preference stack of first money outs in later rounds.
for laypeople this is like the, "what does salesforce even do" meme, but the explanation is a million times more ridiculous....
It will be a nice discount acquihire for Microsoft in a few years.
Databricks on azure is huge. I've heard that in some Azure regions, over 70% of the compute usage is just Databricks. So there is definitely an incentive for MS to acquire them.
Except that Microsoft looks better if you have the illusion of choice. Azure Databricks or Azure Databricks but you have to build it yourself out of janky azure services
I always struggled to understand how do you make a company adopt a platform like databricks to « manage data » isnt managing data a minefield with plenty of open source pieces of software that serve different purposes ? who is the typical databricks customer?
you kill off all open source pieces, in turn compliance is happy, and a CTO is happy because he has a maintenance contract and can blame other people if stuff goes wrong.
It's a way to get those pesky Python people to shut up
Oh, and a CTO is always valued more if he manages a 5 million Databricks budget, where he can prove his worth by showing a 5% discount het negotiated very well, than a 1 million whatever-else budget that would be best in class. Everybody wins.
> who is the typical databricks customer?
The CTO of a "traditional" company who is responsible for "implementing digital transition".
I think that's the main offering of databricks- you get a "data platforn in a box" and navigating the forest of piecemeal solutions is replaced with telling your data science and analytics teams to "use databricks".
It's easy to look on knowing lots about data tools and say "this could be better done with open source tools for a fraction of the cost", but if you're not a big tech company, hiring a team to manage your data platform for 5 analysts is probably a lot more expensive than just buying databricks.
What exactly is a "data platform"?
We have a large postgres server running on a dedicated server that handles millions of users, billions of record updates and inserts per day, and when I want to run an analysis I just open up psql. I wrote some dashboards and alerting in python that took a few hours to spin up. If we ever ran into load issues, we'd just set up some basic replication. It's all very simple and can easily scale further.
Pull out the Prince albums, its time to party like its 1999.
https://www.youtube.com/watch?v=I6IQ_FOCE6I
>Series K
Mega lmao. They already owe $20B.
Their revenue is good, though, further adding to the mistery.