Nvidia and Capital One back Databricks at $43 billion valuation in latest funding round
Ali Ghodsi, co-founder and CEO of Databricks.
Databricks
As some high-valued tech startups look to the long-dormant IPO market for their next funding round, Databricks is still finding investors that are happy to keep the company private, at least for now.
Databricks, which sells data analytics software, said Thursday that it raised more than $500 million in fresh capital at a $43 billion valuation.
Founded in 2013 and based in San Francisco, Databricks last announced funding during the boom market of 2021, at a $38 billion valuation. Since then, cloud software stocks have plummeted, with rival Snowflake losing 45% of its value. However, unlike fellow software IPO candidates Canva and Stripe, Databricks has managed to maintain its share price.
In the latest round, shares were sold at $73.50 a piece, roughly equal to where they were priced in 2021. The $5 billion increase in valuation is the result of new shares that CEO Ali Ghodsi said have gone to the 3,500 employees the company has hired in the past two years, as well as to investors. Headcount now sits at around 6,000.
While high interest rates and economic concerns continue to weigh on the tech market, particularly on companies that are burning cash, Databricks is capitalizing on a surge of momentum in artificial intelligence. In July, Databricks acquired MosaicML, a startup with software for efficiently running large language models that can spit out natural-sounding text, for $1.3 billion.
Nvidia is a new investor in Databricks, a notable addition as the chipmaker has been pouring cash into a host of AI infrastructure startups. Hugging Face, Cohere and CoreWeave are a few of the companies that Nvidia has backed at multibillion-dollar valuations.
Ghodsi said that he started talking to Nvidia CEO Jensen Huang “a while back,” and that a strategic tie-up has become more important with both companies going deeper into AI. Databricks spends a lot of money on Nvidia’s graphics processing units, largely through various public clouds, and even more now that his company owns Mosaic. He added that Nvidia and Mosaic had been in talks about a partnership before the acquisition.
“It made sense to partner more closely,” Ghodsi said. “At the core, we’re in complementary markets.”
Equally notable is the participation of Capital One’s venture arm as an investor for the first time. That’s because the bank is Snowflake’s largest customer. Snowflake finance chief Mike Scarpelli said at an investor event in August 2022 that Capital One was spending almost $50 million annually with Snowflake, and in November he said that the firm is its top customer and that it’s “taken them 5.3 years to get where we are now.”
Capital One is also a Databricks customer and uses the technology partly for fraud detection, according to a 2021 blog post.
Existing investor T. Rowe Price led Databricks’ latest round, and was joined by Andreessen Horowitz, Baillie Gifford, Fidelity, Morgan Stanley’s Counterpoint Global and Tiger Global, among others.
Ghodsi said that when the company started talking to investors about a potential financing round a couple of months ago, his “original guidance was no more than $100 million.” That number ultimately swelled fivefold as more investors wanted to join, he said.
As for a potential initial public offering, Ghodsi said that’s still on the road map, and that this funding doesn’t change the company’s plans. He didn’t say when an IPO might happen.
Databricks will get to see how much demand there is for new tech opportunities in the coming weeks. Chip designer Arm is returning to the public market on Thursday after getting taken private in 2016. Grocery delivery company Instacart and software vendor Klaviyo filed their prospectuses last month. There hasn’t been a notable venture-backed tech IPO in the U.S. since late 2021.
Many enterprise software makers have been trying to limit spending while growth rates slow because the uncertain economy has led big customers to reduce their purchasing. Databricks has stayed in growth mode and hasn’t announced any layoffs.
Ghodsi said much of the cost cutting he’s pursued was in his company’s use of technology, particularly software subscriptions.
“We spent $30 million on 300 pieces of SaaS software,” Ghodsi said, referring to software as a service. “I said, ‘Let’s halve that.'”
In the quarter that ended in July, Databricks said it reached a $1.5 billion annual revenue run rate, with sales growing 50% year over year. Snowflake, whose shares debuted on the New York Stock Exchange in 2020, reported 36% growth in the latest quarter to $674 million in revenue.
WATCH: MosaicML acquisition will allow us to democratize A.I. for startups
Cheng Xin | Getty Images
Airbnb reported second-quarter results on Wednesday that beat analysts’ expectations.
Here’s how the company did based on average analysts’ estimates compiled by LSEG:
- Earnings per share: $1.03 vs. 93 cents expected
- Revenue: $3.10 billion vs. $3.04 billion expected
Revenue increased 13% from $2.75 billion during the same period last year. The company reported net income of $642 million, or $1.03 per share, up from $555 million, or 86 cents per share, a year earlier.
In the third quarter, Airbnb expects to report revenue of $4.02 billion to $4.10 billion, or $4.06 billion in the middle of the range. Analysts were expecting $4.05 billion for the period, according to LSEG.
In a letter to shareholders, the company said it had a strong second quarter, even against a volatile macroeconomic backdrop. U.S. President Donald Trump’s sweeping tariff and trade policies plunged markets into chaos for much of April.
“Despite global economic uncertainty early in the quarter, travel demand picked up, and nights booked on Airbnb accelerated from April to July,” the company said.
Airbnb reported 134.4 million nights and seats booked, up 7% from a year ago and above the 133.35 million expected by StreetAccount.
Gross booking value, which Airbnb uses to report host earnings, service fees, cleaning fees and taxes, totaled $23.5 billion in the second quarter. That figure is above the $22.66 billion expected by analysts polled by StreetAccount.
Airbnb said it received authorization for new share repurchase program of up to an additional $6 billion of Class A common stock. The company said it repurchased $1 billion of Class A common stock during the second quarter, and previously had authorization to purchase $1.5 billion more as of June 30.
Airbnb shares were down slightly in extended trading. They’ve slipped 0.7% for the year as of Wednesday’s close, while the Nasdaq is up almost 10%.
Airbnb will hold its quarterly call with investors at 4:30 p.m. ET.
Doordash food delivery service in New York City on Feb. 13, 2025.
Danielle DeVries | CNBC
DoorDash shares climbed about 5% in extended trading on Wednesday after the food delivery company reported better-than-expected earnings and revenue for the second quarter.
Here’s how the company did compared to analyst estimates based on LSEG’s consensus:
- Earnings per share: 65 cents vs. 44 cents expected
- Revenue: $3.28 billion vs. $3.16 billion expected
Revenue jumped 25% from $2.63 billion a year earlier, DoorDash said in a press release. The company reported net income of $285 million, or 65 cents a share, after recording a loss of $157 million, or 38 cents per share, in the same period a year ago.
Orders increased 20% from a year earlier to 761 million. Gross order value (GOV) rose 23% to $24.2 billion.
DoorDash shares have soared 54% this year as of Wednesday’s close, lifting the company’s market cap to $109 billion. The Nasdaq is up almost 10% in 2025.
Doordash one day stock chart.
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