‘It’s stupid to go public this year’: Databricks CEO explains why he’s waiting to go public
Databricks has just closed one of its largest funding rounds ever, Raised a staggering $10 billion in new capital. Naturally, technology investors were quick to ask what this meant for the company’s upcoming IPO. During an event in San Francisco on Tuesday night, Ali Ghodsi, CEO of Databricks, explained why he will wait until at least 2025 to go public.
“This year was an election year. We wanted to get some stability — people are worried about interest rates and inflation… so we said look, it’s stupid to go public this year,” Ghodsi said during an interview with Dan Primack during the conference. We will definitely wait.” Axios AI Summit. “The earliest theoretical possibility of an IPO would be next year, and then there are lock-up periods, so it will be a very long period for employees to get liquidity.”
Data bricks This uses the “J Series” To allow early employees to cash out and continue to grow. While 2024 has been uncertain in many ways, the IPOs of ServiceTitan, Redditand other companies have been largely successful.
But why take the risk when you can raise as much money as Databricks?
This latest round could have been double the amount it just closed, Ghodsi said. we He knew investors were clamoring to get inBut the craze pushed Databricks up its stock price. The data analytics company has begun trying to raise between $3 billion and $4 billion in this round, according to Qudsi, but he says that Press reports on their fundraising efforts It drove interest through the roof.
“I saw this Excel sheet where they keep a record of all the people who want to invest. It was $19 billion in interest, and I almost fell out of my chair,” Ghodsi said. “And we didn’t even talk to everyone. I thought to myself: Oh my God, this is a huge amount of numbers. And then we actually raised the price.”
Even after the impressive fundraising, Ghodsi doesn’t rule out a Databricks IPO in 2025. However, he said it could be in 2026 as well. Going public is much less important than it was 10 to 15 years ago, as this record-breaking round indicates, but it’s still something the company wants to do, he said. However, Qudsi is not trying to push for an IPO before the “AI bubble,” as he calls it, bursts.
“I mean it’s the height of the AI bubble. It doesn’t take a genius to figure out that a five-person company has no product, no innovation, no intellectual property — just fresh graduates — [is not] “Its worth hundreds of millions, and sometimes billions,” Qudsi said. “You’re getting billion-dollar valuations for these startups that don’t have anything, and it’s a bubble.”
The Databricks CEO didn’t clarify what startups he was talking about, but we certainly saw it Lots of AI unicorns this year. However, none of this seems to worry Qudsi, who says his company and its valuation can stand the test of time. He believes his company has already won its first major battle with another data analytics startup, Snowflake.
“We had a program called ‘The Snow Melts,’” Qudsi said, emphasizing. Reports of an initiative within Databricks to steal business from Snowflake. “We were going after Snowflake and demonized them, but that’s behind us.”
These efforts to tarnish Snowflake’s image have come at a heavy price, leading Databricks to do just that He paid $2 billion to buy a small startup called Tabular. Snowflake also reportedly wanted to buy Tabular, even though the company was only generating $1 million in annual recurring revenue at the time.
Now, Databricks is going after bigger competitors with products that rival giants like Salesforce and Microsoft. Ghodsi says data and AI will continue to play a slightly more important role in people’s lives every year, and he believes his company is well-positioned to fill this niche.
