Databricks, the data and artificial intelligence software company, announced Thursday it has closed a $5 billion strategic funding round, raising its valuation to $190 billion. This figure represents an increase from the $188 billion valuation reported in a term sheet signed last month. The company initially sought to raise $1 billion, but investor interest led to offers exceeding $15 billion, prompting Databricks to accept a larger sum. The funding round was led by Coatue, with participation from existing investors Blackstone, MGX, and accounts advised by T. Rowe Price Associates, Inc. and T. Rowe Price Investment Management, Inc. New investor Sixth Street Growth also joined the round. Additional new investors included BOND, Clearlake Capital, Point72, Premji Invest, and TPG, alongside returning backers such as Andreessen Horowitz, Dragoneer, and Fidelity Management & Research Company.
The increased funding will support Databricks' continued investment in its core AI and data products. These include Lakebase, a serverless Postgres database designed for AI agents, Genie, an AI assistant that extracts insights from business data, and Unity AI Gateway, which provides multi-AI governance and cost controls. Databricks CEO and co-founder Ali Ghodsi stated that enterprises require AI agents that can remember context, deliver accurate answers, and execute tasks efficiently without exceeding budgets. He added that this necessitates real-time operational data via Lakebase, comprehensive business context from Genie, and multi-AI cost controls through Unity AI Gateway.
Databricks reported strong financial performance, surpassing a $7 billion annualized revenue run-rate during its second fiscal quarter, which ended July 31. This represents more than 80% year-over-year growth. The company also maintained positive adjusted free cash flow over the past 12 months. Its Lakehouse data warehousing product has exceeded a $1.5 billion revenue run-rate, demonstrating over 100% year-over-year growth. Lakebase, introduced in 2025, has already surpassed a $100 million revenue run-rate. More than 1,000 Databricks customers now have an annual consumption rate exceeding $1 million, with over 100 customers surpassing the $10 million threshold.
Thomas Laffont, co-founder of Coatue, highlighted Databricks' decade-long foresight in anticipating AI's trajectory, noting the company's current role as foundational infrastructure for AI development and scaling. He also observed that Databricks has compressed research and development timelines from years to months, operating more like a research laboratory than a typical software company. This accelerated pace of innovation is critical for the evolving AI landscape, where rapid development and deployment are paramount.
The $190 billion valuation marks a significant increase from the $134 billion valuation Databricks held after its December 2024 funding round, when it raised $4 billion. At that time, Databricks reported approximately $5.4 billion in annualized recurring revenue with 65% growth. The acceleration to a $7 billion run-rate and over 80% growth by Q2 2026 implies a revenue multiple of approximately 27x the run-rate at the current valuation. This valuation places Databricks at roughly 1.6 times the market capitalization of its main public competitor, Snowflake.
The substantial capital infusion positions Databricks to further expand its AI capabilities and cloud services, which are resource-intensive. The company plans to use the funds to support its aggressive plans for AI research and cloud infrastructure spending. This includes potential future AI acquisitions and deepening AI research efforts.