AI start-up Databricks raises $13.5b from investors including GIC

Databricks has secured a US$62 billion valuation after raising a whopping US$10 billion (S$13.5 billion) in one of the largest venture capital funding rounds in history, underscoring the unprecedented appetite for fast-growing private companies that have seen accelerated growth due to artificial intelligence (AI).

The oversubscribed round, led by Mr Joshua Kushner's Thrive Capital, drew commitments from elite investors including Andreessen Horowitz, DST Global, GIC, Insight Partners and WCM Investment Management, confirming an earlier Reuters report last week.

Existing backer Ontario Teachers' Pension Plan and new investors Iconiq Growth, MGX, Sands Capital and Wellington Management also participated.

Databricks expects to achieve positive free cash flow for the first time in the quarter ending Jan 31, 2025, and to cross the US$3 billion revenue run rate in January. It also expects to generate US$3.8 billion in revenue in the following fiscal year, sources previously told Reuters.

The funding will be mostly used to let some employees cash out their stock, which comprises a significant chunk of the compensation at start-ups and faces expiration after several years.