Price bubble? Databricks raising over $1.5 billion

Bloomberg reports unrevealed sources saying Databricks is raising a $1.5 billion-plus round, valuing the company at $38 billion.

This follows on from a $1 billion G-round fund raiser in February which valued Databricks at $28 billion. Are we seeing a price bubble?

Databricks provides analytical services on a data lake — raw data stored before being extracted, transformed and loaded into data warehouses such as Snowflake. Its open-source Delta Lake software is built using Apache Spark and data is processed using SQL Analytics software.

Taking this in-process funding round into account, Databricks will have raised $3.4 billion in total. 

We have called this latest round an H-round in our table, as it uses a new and higher valuation for Databricks.


This year:

  • Dremio has just pulled in a $135 million D-round.
  • Kyligence raised $70 million.
  • Firebolt has raised $37 million.
  • Starburst raised $100 million.

This totals $2.842 billion. 

We can’t see how Databricks needs the money. It’s inconceivable it could have spent a billion dollars to grow its business since February.

We all know about price bubbles — when people, including investors, pay way over the realistic price for a stock. Is it possible that savvy VCs, encouraged by Snowflake’s massive and successful IPO, are pouring far too much money into data analytics startups and won’t get their money back? Are the data analytic startup valuations going so high as to be fantasies?