Databricks, a software developer that helps companies analyze large quantities of data and run AI-powered services, is seeking fresh capital at a $188 billion valuation as investor Coatue Management leads the planned financing. The strategic round would be Databricks' second financing this year and is expected to include money from both new and existing backers. Databricks hopes to complete the funding this summer, potentially giving the company additional resources to pursue acquisitions and expand its artificial intelligence platforms.
The proposed $188 billion valuation would represent a 40% increase from the $134 billion valuation Databricks achieved during its February financing round. At that time, Databricks said it was on track to generate $5.4 billion in annual revenue, with $1.4 billion expected to come from its AI products. Investors may view the sharp valuation increase as a sign of continued private-market interest in the company's growth as businesses spend more on data management and AI-powered software.
Databricks plans to expand Genie and Unity AI Gateway, platforms that help companies monitor and control the costs associated with using artificial intelligence. The company competes with Snowflake NYSE:SNOW, a software company operating in the data market, Alphabet NASDAQ:GOOGL, whose Google business offers the BigQuery data platform, and Microsoft NASDAQ:MSFT, whose competing product is Fabric. Databricks has also long been viewed as a potential initial public offering candidate, and the latest financing could keep investor attention focused on the company's growth, AI revenue, acquisition plans, and position against its publicly traded rivals.