Databricks Set To Be A Fierce Competitor To Snowflake

San Francisco-based company Databricks is a data- and AI- focused company that interacts with corporate information stored in the public cloud. Founded in 2013 by the creators of Apache Spark, the company focuses on machine learning, streaming data processing, and data lake and SQL analytics.

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Now, the company announced it has raised $1 billion in Series G funding, bringing it to a $28 billion post-money valuation. The investment was led by new investor Franklin Templeton Investments Corp. with other new backers including Amazon Web Services Inc. and Inc.’s venture arm. Microsoft Corp. and Andreessen Horowitz LLC are among earlier investors that also bought in.

The interest from these financial services firms and cloud giants makes it clear that Databricks' approach to analytics has great appeal. Data warehouse powerhouse Snowflake may have had the biggest software IPO of all time, but this recent funding round has many experts comparing the two firms.

Databricks is among the most hotly anticipated tech public offerings of 2021 — alongside UiPath — and has padded its balance sheet in a way that enables them to avoid an IPO in favor of a direct listing.

The new funding will be used to accelerate innovation and drive customer adoption and success. Databricks is also set to invest in furthering adoption of its lakehouse model. This includes building its engineering team in the U.S., Canada, and the Netherlands, investing in customer success, further building the partner ecosystem, and ramping up international go to market expansion.

In recent months, what has set Databricks apart is that it broke out its revenue for different use cases on its platform. “If you’re a one-trick pony, you invented this cool thing that has product-market fit, then you just build this go-to market machine around it. I think that’s a risk,” CEO Ali Ghodsi said. That also explains why Databricks, even at a $28 billion valuation, prefers to stay private, for now.

Ghodsi told CNBC after the funding announcement that his company is considering a direct listing, but hasn’t made a decision. “All options are on the table,” the CEO said. He added that a public listing is likely this year but for now he’s taking advantage of private capital because the company can “get all the benefits without even going public.”