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

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

#141

Post by benrutter »

djrj477dhsnv wrote: post #103
benrutter wrote: post #29

Earlier quoted context omitted.

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…

What exactly is a "data platform"? We have a large postgres server running on a dedicated server that handles millions of users, billions of record updates and inserts per day, and when I want to run an analysis I just open up psql. I wrote some dashboards and alerting in python that took a few hours to spin up. If we ever ran into load issues, we'd just set up some basic replication. It's all very simple and can eas…

Sounds like you have the benefit of a nicely designed server and good practices. A lot of companies aren't the same.

Imagine you're a big company with loads of teams/departments multiple different types of SQL servers for data reporting, plus some parquet datalakes, and hey, just for fun why not a bunch of csvs.

Getting data from all these locations becomes a full time job, so at some point someone wants some tool/ui that lets data analysts log into a single thing, and get the experience that you currently have with one postgres server.

I think it's not a problem of scale in the CS sense, more the business sense where big organisations become complex and disorganised and need abstractions on top to make them workable.

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

#142

Post by mgfist »

JCM9 wrote: post #96
VoidWhisperer wrote: post #39

Earlier quoted context omitted.

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. [0]: https://www.databricks.com/company/newsroom/press-releases/d...

Whenever companies release glowing fluff PR about their amazing financials they key word in there is “non-GAAP.” i.e. when we exclude a bunch of pesky costs and other expenses that are the reason we’re not doing so well, we’re actually doing really well! Non-GAAP has its place, but if used to say the company is doing well (vs like actual accounting) that’s usually not a good sign. Real healthy companies don’t need to…

Yes but free cash flow is free cash flow, and that's what matters for survival (i.e. run-rate). So long as fcf is positive, you'll never go bankrupt.

Really what they don't tell you is how much SBC they have. That's what crushes public tech stocks so much. They'll have nice fcf, but when you look under the hood you realize they're diluting you by 5% every year. Take a look at MongoDB (picked one randomly). It went public in 2016 with 48.9m shares outstanding. Today, it has 81.7m shares outstanding. 67% dilution in 9 years.

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

#144

Post by braza »

ygouzerh wrote: post #107
jakozaur wrote: post #93

It doesn't look like a typical round for raising capital for investments. Instead: 1. Liquidity: Early investors could sell to late-stage investors, since they are not IPO. Their previous round looked like that. 2. Markup: The previous investors can increase their valuation by doing a round again. It also provides a paper valuation for acquiring new companies. That combined with preferred stock (always get 1x back) m…

So if I understand well, investors are not really investing for the company results, but more on the hope that people will continue to invest in the company? In a kind of a ... ponzi pyramid?

Not a Ponzi, but definitely some markup and valuation engineering.

Let’s say that Databricks has 100B valuation (just for the sake of simplicity).

They do this round, and due to this markup they can do acquisitions via stock option exchange. For instance, let’s say that you’re Neon, and you as a founder wants some sort of exit.

It’s preferable to get acquired for 1B with let’s say, 100Mi in cash and 900Mi in Databricks paper valuation shares; than to wait for a long process for an IPO.

If the mothership company (Databricks) goes public, you have liquidation and a good payday, or in meanwhile you can sell secondaries at a discount.

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

#145

Post by mgfist »

TrackerFF wrote: post #4

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?

Both have benefits. Staying private means a lot less distractions, less investor scrutiny (good and bad), and the general ability to do whatever you want (good and bad).

It's a lot easier to stay long-term focused without investors breathing down your neck. As a private company you're not dealing with shortsellers, retail memers, institutional capital that wants good earnings now, etc..

Of course, the bad side is that if the company gets mismanaged, there's far less accountability and thus it could continue until it's too late. In the public markets it's far easier to oust the C-suite if things go south.

It's a shame that the trend of staying private longer means retail gets shut out from companies like this.

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

#146

Post by franktankbank »

apwell23 wrote: post #98
JCM9 wrote: post #94

Looks like someone is thinking “hey let’s wave our hands in the air and talk about AI and someone will write us a cheque!” as a way to kick the can down the road that this far into it they’re still not selling a product that’s making money. Looks a bit desperate TBH.

yep i still don't understand how hosting notebooks and spark ( which btw is ancient big data tech) is worth 100B. whats so hard about this. i don't get it.

All the smart boomers retired 100 years ago. Now we are left with the dumdums. Forget "its the economy stupid", now "its the boomers stupid".

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

#147

Post by Temporary_31337 »

EdwardDiego wrote: post #59
elAhmo wrote: post #27

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.

Them and Snowflake have been in an acquisition race, gobbling up data engineering startups like Pac-Man. That costs a fair bit of dosh.

What's the end game? What are investors expecting and how are they expecting the company to get $100b in profits and over what period of time?

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

#148

Post by Temporary_31337 »

dh2022 wrote: post #128
austhrow743 wrote: post #49

Earlier quoted context omitted.

Do we know that they need to raise and are not sustainable? I don't think them raising is evidence of either.

Why would they raise money if they do not need? Raising money dilutes existing shareholders - who are probably not too happy about it.

depends on who is making a decision and how exactly is the funding round structured - for some investors, diluting other shareholders is actually a good thing. For existing employees, if they get an option to partially cash out now is probably better than waiting indefinitely for an IPO etc

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

#149

Post by Temporary_31337 »

espadrine wrote: post #41
elAhmo wrote: post #27

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.

At least it is not unprecedented. Palantir raised a series I in 2020 after 17 years of operation.

At that time the Palantit valuation was considered 'hefty / overpriced' at $9B. Current stock price valuation, post IPO is a completely detached from fundamentals ~$378B

if you were to apply the same ratio to Databricks it would have to trade at 42 000 000 000 000 000 USD - enough to buy the entire US sovereign debt, the moon, all earth's minerals with plenty to spare. A completely rational market if you ask me.

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

#150

Post by Temporary_31337 »

quickthrowman wrote: post #69
alwahi wrote: post #56

Earlier quoted context omitted.

i don't think that it is possible to raise a 100 billion without name dropping ai in every sentence in every meeting you have with a potential investor....

They are not raising $100B, they are raising money at a valuation of $100B.

what is the investor thesis for coming in with such a multiple? You know they will have to find a a greater fool, possibly the public to buy at an even higher ratio to break any profit on that....
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