Last month, Databricks, a San Francisco-based company specialising in data analytics and AI solutions, raised $10 billion in funding. With this amount, the company’s valuation skyrocketed to $62 billion. Now, Databricks has landed $5 billion financing in its largest debt raise ever, as per Bloomberg.
The funds were raised from lenders such as Blackstone, Apollo Global Management and Blue Owl Capital, claims the report citing people with knowledge of the matter.
Debt package details
It includes a $2.25 billion term loan from direct lenders, which is structured as an annual recurring revenue loan and pays 4.5% points over the Secured Overnight Financing Rate. It also includes a $2.5 billion revolving credit facility provided by a large group of banks, including JPMorgan and a $500 million delayed-draw term loan.
Previously, while raising $10 billion, Databricks said it will invest the capital towards new AI products, acquisitions, and significant expansion of its international go-to-market operations. In addition to fuelling its growth, this capital is expected to be used towards providing liquidity for current and former employees, as well as paying related taxes.
Now, the proceeds of this latest financing will be used to offset tax burdens associated with stock sales from staffers.
Recent achievements
Databricks surpassed over 60% year-over-year growth in the third quarter of 2024. It is all set to surpass a $3 billion revenue run-rate by the end of January 2025. This way, it will continue to achieve non-GAAP subscription gross margins above 80%, having over 500 customers consuming at over $1 million annual revenue run-rate. Also, the company will achieve a $600 million revenue run rate for Databricks SQL, the company’s intelligent data warehousing product.
This came after a year of global business expansion. Databricks announced its new European regional hub in London, the Asia Pacific and Japan (APJ) regional hub in Singapore, and an expanded presence in Latin America and the Middle East.
Democratises access to data and AI
Databricks was founded in 2013 by a team of seven researchers from UC Berkeley’s AMPLab, including Ali Ghodsi, Matei Zaharia, Reynold Xin, Ion Stoica, Patrick Wendell, Andy Konwinski, and Arsalan Tavakoli-Shiraji. It was established with a mission to streamline data processing and AI applications.
Currently, the company has attracted global attention for its ability to address challenges in modern data infrastructure. Its focus on innovation has established it as a key player in the rapidly expanding field of AI-driven analytics.
The Databricks Data Intelligence Platform democratises access to data and AI, making it easier for organisations to harness the power of their data for analytics, machine learning, and agentic AI applications. Built on open data formats and architectural standards, the platform enhances accuracy for better cost and risk control.
Customers use the Data Intelligence Platform to find and treat diseases and cancer earlier, identify new ways to combat climate change, detect financial fraud, develop pharmaceuticals faster, reduce time to mental health intervention, decrease local financial inequality, and much more.
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