IPO: Databricks

First time post to this sub, but long time lurker, even before I had a Reddit account.

Recently I’ve been interested in putting aside some money to drop on an IPO later this year for a company that I felt had great potential. After looking around I found Databricks and thought I would share it and simultaneously gather opinions on this from those who know much more than I do.

Before I start I want to make two things very clear:

1. **This is not financial advice, nor am I a financial advisor.**

2. **Databricks, as of this moment, has not filed for an IPO.** I simply believe they will later this year and am being proactive in preparation for one.

So for those who don’t already know, Databricks is a artificial intelligence and data company that was founded in 2013 by some CS students at Berkeley. These same students also founded Apache Spark, an open-source analytics engine used to process data on a large scale. Databricks is basically a way to commercialize the Apache Spark software for enterprises.

Databricks has had multiple rounds of funding, and the last three rounds raises substantially more each time. See below for funding rounds:

2013- 13.9 Million

2014- 33 Million

2016- 60 Million

2017- 140 Million

Feb. 2019- 250 Million

Oct. 2019- 400 Million

Jan. 2021- 1 Billion

The latest round of funding puts the companies **valuation at an impressive 28 Billion.** The two funding rounds in 2019 were lead by Andreessen Horowitz and the 2021 round was lead by Franklin Templeton Investments. Databricks also has multiple other “big name” investors such as Fidelity, Microsoft, Blackrock, and Sales Force Ventures which, for me atleast, shows some promise for their future.

Databricks also has a decent customer base or their services, boasting companies such as Shell, Comcast, T-Mobile, and CVS Health.

An important point for me is they essentially pioneered the idea of using “lakehouse” architecture in the cloud. After all, we are talking about a cloud start up that is **backed by all the major players in the cloud computing industry (Amazon Web Services, CapitalG, Microsoft, and Sales Force).** This hints to the possibility that they could be a leader in the future of cloud computing, which in and of itself, is the future of our world’s technology.

Databricks also recently passed 425 Million in Annual Recurring Revenue, **a 75% growth year over year. **

Databricks CEO, Ali Ghodsi, also has made very clear that they have left some valuation on the table in every round of funding, saying they could have easily reached a 35 Billion valuation. His reasoning for doing this it seems is to negate the possibility of them becoming overvalued so that when they eventually do go public they can attract and subsequently retain as many long term investors as possible.

I know that this is a long read but I wanted to get everything I was thinking out there. I do not now when, or if, they will go public. However, when they do I might strongly consider ordering pre-IPO.

Thanks for the read, and buy the dip. ✌🏻

*Sources:*

-https://www.google.com/amp/s/www.forbes.com/sites/alexkonrad/2021/02/01/databricks-at-28-billion-valuation-from-aws-google-microsoft-salesforce/amp/

-https://growjo.com/company/Databricks

-https://en.m.wikipedia.org/wiki/Databricks

-https://databricks.com/company/about-us

-https://www.google.com/amp/s/investmentu.com/databricks-ipo/%3famp

-https://www.google.com/amp/s/www.kiplinger.com/investing/stocks/ipos/601672/hot-upcoming-ipos-to-watch-2021%3famp