Regardless of the product and idea they had, a company that is 15 years old and raised 10+ billion dollars still needing to raise money after all this time is ridiculous.
Not being sustainable after all this time and billions of dollars is a sign company is just burning money, and a lot of it. wework vibes.
espadrine · 47s ago
At least it is not unprecedented. Palantir raised a series I in 2020 after 17 years of operation.
VoidWhisperer · 10m ago
They were expecting to be cash flow positive in Jan 2025, according to [0]. That said, it is hard to tell if they actually became cash flow positive since with them still being a private company, they aren't required to release that information.
It feels like they may have got market share using low costs and this has led to this situation.
ed_elliott_asc · 1h ago
I can’t help feeling it is the first major misstep from databricks , they are raising the money for their hosted Postgres and ai platform.
Ai is not far away from dropping to the “trough of disillusionment” and I can’t see why databricks even needs Postgres.
Hopefully I’m wrong as I’m a big fan of databricks.
benrutter · 32m ago
Definitely seem like bad investments from my perspective on databricks.
Databricks is great at offering a "distributed spark/kubernetes in a box" platform. But its AI integration is one of the least helpful I've experienced. It's very interuptive to a workflow, and verg rarely offers genuinely useful help. Most users I've seen turn it off, something databricks must be aware of because they require admins permission for users to opt out of AI.
I don't mean to rant, there's lots that is useful in databricks, but it doesn't seem like this funding round is targeting any of that.
ed_elliott_asc · 17m ago
Yeah doesn’t seem like core functionality
bayindirh · 14m ago
Everybody wants a pie in that AI bubble, whether it sticks or not, and that's a bad thing for companies' long term vision.
It might come down like the dotcom bubble like fallout when this thing bursts.
rmonvfer · 4m ago
If they run out of letters, will they eventually raise a series AA?
thinkindie · 1h ago
I’ve never seen a Series K before. I wonder how their cap table looks like.
captn3m0 · 1h ago
In India, Zomato[0] (now listed) and Swiggy[1] both had a Series K. SpaceX has only gotten to a Series J, but they've done some secondary sales since. Apparently, Palantir[2] has had a Series K as well, back in 2015.
What’s the obvious rationale for going through the whole alphabet of funding rounds, instead of going public / IPO after «the usual» number of raising money.
Wouldn’t the current strategy result in some serious stock dilution for the early investors?
n2d4 · 1h ago
Stock dilution doesn't work like that. If a seed investor invests for 5% at a $10mil valuation, and the company goes 10x (ie. a valuation of $100mil), if the company now raises a $100mil Series K, that means the Series K investor owns 50% of the company, and the seed investor got diluted down to 2.5%. However, the new valuation of the company is now $200mil with the cash that the new investor brought in, effectively making the seed investor's investment worth the same.
It's a smaller piece of a bigger pie.
To answer your question, the right question to ask is why go public when you can remain private? Public means more paperwork, more legalese, more scrutiny, and less control for the founder, and all of that only to get a bit more liquidity for your stock. If you can remain private, there really isn't much of a reason to not do that.
dgoldstein0 · 52m ago
An IPO means selling a whole bunch of people, whereas fundraising rounds pre-IPO mean courting a small number of large investors. I think it's partly a sign of the times that there's enough concentrated capital that you can get enough money from private hands to not need to go the IPO route yet.
tormeh · 39m ago
The private market is getting out of hand, then. I think it makes sense for private companies beyond a certain size to have the same reporting requirements that listed ones do. At these valuations the private market for startups is becoming systemically important.
helltone · 33m ago
This heavily depends on share classes and preferences. Surely the new investor wants better terms. The issue isn't so much dilution as a preference but added risk of never even getting a payout at all.
epolanski · 46m ago
> If you can remain private, there really isn't much of a reason to not do that.
With the exception of founders it's better for literally everybody else, more scrutiny, more pressure on c-corp, more liquidity, etc.
impulser_ · 1h ago
Because they don't want the public market to put a real valuation on the company, when they can still raise money with a made up valuation.
simonebrunozzi · 1h ago
A new round is easier than IPO. Especially when the IPO outcome is not necessarily positive.
echelon · 1h ago
If the private markets can offer you the liquidity you need on your terms, then why subject yourself to the scrutiny of the public markets?
Plus the markets are in a weird state right now.
jgalt212 · 1h ago
An order of magnitude less scrutiny, but also an order of magnitude in size of investor base. The private markets trade at Palantir levels so why go public. Also the private markets are now routinely doing secondary transactions so even less reason to go public.
Lionga · 1h ago
IPO needs real numbers, VCs just want buzzwords
thrown-0825 · 57m ago
lol analytics platform that no one outside the industry has heard of valued at $100B.
just keep rolling out those fundraising rounds and kick the can down the road.
ed_elliott_asc · 14m ago
I’d imagine pretty much all of the s and p 500 companies rely on databricks, a large percentage of them at least
_dark_matter_ · 22m ago
I'm as skeptical as anyone, but have you ever heard of companies like Oracle, which got rich off a database or Snowflake (current market cap 65B)? Companies pay oodles of money for that capabilities.
No comments yet
namenotrequired · 43m ago
Why Databricks would do this (rather than IPO) is obvious. When you can raise privately, it’s way easier than IPO. The real question to me is why the investors (new and previous) are going along with it?
xendo · 34m ago
Prediction for 2026 - investors will be shitting bricks.
nikolayasdf123 · 55m ago
> Series K
I never seen such invertment round. aren't you supposed to stop at C or D? .. or at least at some point?
nikolayasdf123 · 54m ago
wonder what they employees think. will they ever IPO and cashout?
tormeh · 42m ago
If their options haven't converted to stock yet, it's not looking good. This is the sort of shenanigans that demand a strike. And ideally regulation.
flarg · 33m ago
Options can a significant portion of sign on bonus but they typically vest over several years so I guess they are hoping for an IPO eventually. IMHO Databricks will be overtaken by "events" including AI disillusionment, broader open source tools and broader education across the workforce. So the eventual IPO will not happen.
tormeh · 28m ago
Depends. Some options only vest in the case of an "exit event", i.e. an acquisition or an IPO. At this point I would assume such options are borderline worthless.
IshKebab · 10m ago
Yeah I think this is how it usually works, and yeah at $100bn valuation they are now 100% worthless, because investors get paid first, and there's no way they'll get sold or IPO for more than $100bn.
throwawaydbb · 24m ago
Since this year the employees are vesting RSUs (not options, and also no expiry date) quorterly now, they sell a portion of them (automatically) and pay taxes to the government at each vesting event, as the expiry date no longer exists. For liquidity there are tenders where employees sell their stock privately, so the employees no longer need IPO to cash out.
Just to clarify - for many years employees were getting the RSUs not options, just with the expiratation date attached - which is gone since this year.
retinaros · 45m ago
I always struggled to understand how do you make a company adopt a platform like databricks to « manage data » isnt managing data a minefield with plenty of open source pieces of software that serve different purposes ? who is the typical databricks customer?
benrutter · 27m ago
I think that's the main offering of databricks- you get a "data platforn in a box" and navigating the forest of piecemeal solutions is replaced with telling your data science and analytics teams to "use databricks".
It's easy to look on knowing lots about data tools and say "this could be better done with open source tools for a fraction of the cost", but if you're not a big tech company, hiring a team to manage your data platform for 5 analysts is probably a lot more expensive than just buying databricks.
georgemcbay · 1h ago
Pull out the Prince albums, its time to party like its 1999.
Not being sustainable after all this time and billions of dollars is a sign company is just burning money, and a lot of it. wework vibes.
[0]: https://www.databricks.com/company/newsroom/press-releases/d...
Ai is not far away from dropping to the “trough of disillusionment” and I can’t see why databricks even needs Postgres.
Hopefully I’m wrong as I’m a big fan of databricks.
Databricks is great at offering a "distributed spark/kubernetes in a box" platform. But its AI integration is one of the least helpful I've experienced. It's very interuptive to a workflow, and verg rarely offers genuinely useful help. Most users I've seen turn it off, something databricks must be aware of because they require admins permission for users to opt out of AI.
I don't mean to rant, there's lots that is useful in databricks, but it doesn't seem like this funding round is targeting any of that.
It might come down like the dotcom bubble like fallout when this thing bursts.
[0]: https://appedus.com/indias-zomato-raised-500-million-in-seri...
[1]: https://techcrunch.com/2022/01/24/indian-food-delivery-giant...
[2]: https://www.finsmes.com/2015/12/palantir-technologies-raises...
Wouldn’t the current strategy result in some serious stock dilution for the early investors?
It's a smaller piece of a bigger pie.
To answer your question, the right question to ask is why go public when you can remain private? Public means more paperwork, more legalese, more scrutiny, and less control for the founder, and all of that only to get a bit more liquidity for your stock. If you can remain private, there really isn't much of a reason to not do that.
With the exception of founders it's better for literally everybody else, more scrutiny, more pressure on c-corp, more liquidity, etc.
Plus the markets are in a weird state right now.
just keep rolling out those fundraising rounds and kick the can down the road.
No comments yet
I never seen such invertment round. aren't you supposed to stop at C or D? .. or at least at some point?
Just to clarify - for many years employees were getting the RSUs not options, just with the expiratation date attached - which is gone since this year.
It's easy to look on knowing lots about data tools and say "this could be better done with open source tools for a fraction of the cost", but if you're not a big tech company, hiring a team to manage your data platform for 5 analysts is probably a lot more expensive than just buying databricks.