Cloud technology firm Snowflake (SNOW) saw its shares melt nearly 1% today as private rival Databricks reached a milestone valuation.
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It was revealed that Databricks is getting close to sealing a new funding round which will value it at over $100 billion. That would be over 60% higher than its last round in December.
New Funding
Databricks did not reveal how much money it is raising, but back in December it hit the $10 billion mark in that funding round. The company was then valued at $62 billion.
With the new cash, Databricks is looking to ramp up its AI strategy, expand its suite of AI agents and invest in its new database. It may also look at making more acquisitions in the AI space.
“We’re seeing tremendous investor interest because of the momentum behind our AI products, which power the world’s largest businesses and AI services,” said Databricks Chief Executive Ali Ghodsi. “We’re thrilled this round is already oversubscribed and to partner with strategic, long-term investors who share our vision for the future of AI.”
Databricks recently said it generated $3.7 billion in annualized revenue in July, a growth rate of 50%. The company, which has partnerships with tech giants such as Alphabet (GOOGL)-owned Google and Amazon (AMZN) is expected to IPO at some stage in the future. It could even happen before the end of this year.
Databricks had $2.6 billion in revenue in its fiscal year that ended in January, with a net retention rate over 140%. In the first quarter of the new fiscal year, nearly 50 of Databricks’ 15,000-plus customers are spending over $10 million annually.
Snow Joke
Both Databricks and Snowflake sell data analytics and data-management software that runs on cloud-computing platforms.
Snowflake has a market cap of $66 billion, so the challenge from a stronger Databricks is obvious. But the opportunity for both firms in an expanding AI field is just as clear.
Snowflake’s share price has climbed over 28% in the year-to-date and over 50% in the last 12 months – see below.
The company also reported a strong start to the year with Q1 product revenue reaching $997 million, a 26% year-over-year increase. Snowflake also added 451 net new customers in Q1, growing 19% year-over-year.
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