Report: Databricks Completes Largest Financing Round Yet, Raising $5 Billion

Databricks has reportedly raised $5 billion in financing, its largest debt raise ever, according to a Monday (Jan. 13) Bloomberg report.

The funds were raised from lenders such as Blackstone, Apollo Global Management and Blue Owl Capital, Bloomberg reported, citing people with knowledge of the matter who asked not to be named.

The software firm will use the funds to offset tax burdens associated with stock sales from staffers, according to the report. The fundraise was organized by JPMorgan Chase last year, and follows a $10 billion equity funding round in December that raised its valuation to $62 billion.

Bloomberg noted that several banks, including JPMorgan, Barclays, Citigroup, Goldman Sachs Group, Morgan Stanley and BNP Paribas, provided a $2.5 billion revolving credit facility as part of the debt financing.

In addition, direct lenders are providing a $2.25 billion term loan as well as a $500 million delay-draw tranche that Databricks can use later. The debt’s structure is tied to the company’s annual recurring revenue and pays 4.5 percentage points over the Secured Overnight Financing Rate, Bloomberg said.

Databricks said in December it expects to cross $3 billion in annualized revenue in its fourth quarter, which ends on Jan. 31., according to Bloomberg.

When Databricks announced its $10 billion Series J funding round last month, the artificial intelligence (AI) and software company said it planned to use the capital to develop new AI products, acquisitions and international go-to-market operations, provide liquidity for current and former employees and to pay related taxes.

The round is “substantially oversubscribed,” Databricks Co-Founder and CEO Ali Ghodsi said in the December release.

“These are still the early days of AI,” Ghodsi said. “We are positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers, and our team is committed to helping companies across every industry build data intelligence.”

Interest in AI has sped up Databricks’ growth to over 60% year over year in recent quarters, the release said at the time.

The Databricks Data Intelligence Platform helps organizations use their data for analytics, machine learning and AI applications, according to the release.