FILE PHOTO: Artificial Intelligence words are seen in this illustration taken March 31, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Databricks has secured a $62 billion valuation after raising $10 billion in one of the largest venture capital funding rounds in history, underscoring the unprecedented appetite for AI-focused startups.
The round, led by Joshua Kushner's Thrive Capital, drew investments from elite firms, including Andreessen Horowitz, DST Global, GIC, Insight Partners, and WCM Investment Management.
Existing backer Ontario Teachers' Pension Plan and new investors ICONIQ Growth, MGX, Sands Capital, and Wellington Management also participated.
The round surpasses the $6.6 billion raised by OpenAI in October, reflecting a massive appetite for companies simplifying AI integration and driving soaring valuations for startups like the Microsoft-backed AI pioneer and Elon Musk's xAI.
"These are still the early days of AI," said Ali Ghodsi, co-founder and CEO of Databricks, adding that the round was "substantially oversubscribed."
Databricks will invest the funds in new AI products and acquisitions. It will also let some employees cash out their stock, which comprises a significant chunk of the compensation at startups.
The company competes with Snowflake, which has a market capitalization of about $57 billion. Databricks expects to achieve positive free cash flow for the first time in the quarter that ended Jan. 31 and to cross the $3 billion revenue run rate in January.
The San Francisco, California-based company enables its 10,000 customers, including Jack Dorsey-led payments firm Block, telecom giant Comcast, electric vehicle maker Rivian and energy company Shell to analyze data.
Reuters reported on the deal talks last week.
(Reporting by Niket Nishant in Bengaluru; Editing by Tasim Zahid)
