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Databricks is raising a Series K Investment at >$100B valuation

namenotrequired

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?

ed_elliott_asc

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.

TrackerFF

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

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

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

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.

epolanski

> If you can remain private, there really isn't much of a reason to not do that.

I mean except for founders, literally for everybody else it's better to have more scrutiny, more pressure on c-corp, more liquidity, etc.

impulser_

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

A new round is easier than IPO. Especially when the IPO outcome is not necessarily positive.

jgalt212

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.

echelon

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.

Lionga

IPO needs real numbers, VCs just want buzzwords

thinkindie

I’ve never seen a Series K before. I wonder how their cap table looks like.

captn3m0

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.

[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...

mattbillenstein

Technically speaking - "FUCKED"

thrown-0825

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.

nikolayasdf123

> 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

wonder what they employees think. will they ever IPO and cashout?

tormeh

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.

retinaros

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?

georgemcbay

Pull out the Prince albums, its time to party like its 1999.