Databricks feels the pressure to go public to create liquidity for investors, but it is not committing to any particular timetable for its highly anticipated offering, cofounder and CEO Ali Ghodsi said. Ghodsi could not be drawn on whether Databricks would launch an IPO later this year, or in 2025, if stock market conditions are favorable. One investment banker familiar with Databricks’ strategy estimated its IPO could come in the second half of 2025 or in early 2026. A second banker though thought a listing may occur earlier: https://lnkd.in/eUzupMVp
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Here’s why Databricks is putting an IPO on hold— even though they’re ready. Wall Street has been expecting a Databricks IPO for a while now. And just when the markets seem right, they’re taking a different approach. Databricks is already operating as a public company, doing its audits and financials as a public company would. So why aren’t they going public yet? They’re choosing to act as a public firm by self-reporting business performance, as it waits for the right moment to commit to an IPO. This is what IPO readiness looks like. This is what preparing for an IPO well before you plan to IPO looks like. Databricks can choose their preferred market conditions. There is no rush or panic. This is why I will continue to talk about the immense value in not simply going public- but in IPO preparedness. Doing this teaches you the value of operating as a public entity before going public. That’s exactly why CEO Ali Ghodi says, “It feels like having your cake and eating it, too.”
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Is there any good reason for Databricks to IPO? Databricks has traded very actively in the secondary market for a range of reasons. It's a well known company in a hot space. Also, the CEO has shared information publicly about the company's performance. Visibility into how a private company is doing helps a lot to generate demand. Databricks is also a rare stock that does not trade directly but trades very actively on an indirect basis (ie. no actual shares change hands, but buyers and sellers use structures like SPVs in order to trade). The significant variations in transacted prices are therefore more the result the range of transaction structures that buyers and sellers employ in transfering interests, rather than a lack of available price discovery. Different structures have different prices, and so do different classes (eg. common vs. RSUs) As Rebecca Szkutak of TechCrunch recently wrote, private companies are increasingly satisfying liquidity needs in the private secondary market. What's more, as we start to get robust price discovery, I believe that the private market will act more like the public markets for companies' PRIMARY fundraising needs. Liquid pricing benchmarks will help companies source investors and set fundraising terms much more easily. All of this begs the question: is there something that Databricks can get from going public that it cannot get as a private company? #privatemarket #secondarymarket #liquidity #fundraising #unicorns #preipo
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Conventional wisdom is that Databricks missed an opportunity with the pre-pandemic IPO bubble. It could be argued either way: (1) Venture investors missed cashing out at sublime levels; or (2) Databricks maintained sustainable growth in spite of surging interest rates, and consequently, when market conditions become IPO friendlier, it should be inoculated from the threat of being too ridiculously priced. The good news is one of continued sustainable growth. Or as Thomas W. Dinsmore termed it yesterday, a common sense approach to building its platform from the bottom up rather than some grand strategery from the top down.
WSJ News Exclusive | AI is Driving Record Sales at Multibillion-Dollar Databricks. An IPO Can Wait …
wsj.com
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Databricks, the data analytics platform, is taking a unique approach to going public. Instead of an IPO, the company is self-reporting its business performance while it waits for the right moment to commit. According to Ali Ghodsi, Databricks' CEO, the company is taking this alternative path to becoming a public firm. Stay tuned for more updates on this innovative strategy! #Databricks #IPO #BusinessPerformance #DataAnalytics
WSJ News Exclusive | AI is Driving Record Sales at Multibillion-Dollar Databricks. An IPO Can Wait …
wsj.com
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Databricks Might Delay IPO There are signs that Databricks is not planning for an IPO anytime soon. The company plans, according to The Information, a major cash raise to help employees cash out restricted stock units set to expire in 2026. Read the full story here, and subscribe (free): https://shorturl.at/7MSP4
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In a setback for the #IPO market, tech darling Databricks has announced that it will NOT attempt to go public in the next year as tech industry participants had hoped would bring this long moribound market back from the dolldrums. Instead, The Information reports that: • Databricks may raise cash to buy out employee RSUs • Fundraising could be at a valuation of $55 billion or more • Databricks last raised money at a $43 billion valuation A company of this size should have long ago IPO'd and be exited into the public markets, but why would they, when the costs, risks and challenges are so high? We need a fundamental redesign of the architecture of U.S. capital markets: 1. end decimalization of brokerage commissions 2. loosen the gooseneck on publishing research 3. foster trading of smaller public companies 4. loosen regulatory burdens within Sarbanes-Oxley Act of 2002 and Dodd-Frank Act of 2010 that make compliance costs so high, IPO process so expensive and burdensome 5. introduce some regulation of private capital The JOBS Act over a decade ago was supposed to fix our IPO markets, and it failed miserably. Time to try again, and get it right this time.
Databricks Considers Raising Cash to Resolve Employee Stock Squeeze
theinformation.com
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Databricks' Bold Play: $2 Billion for Tabular In a striking move, Databricks has reportedly shelled out $2 billion to acquire Tabular, a startup with just $1 million in annual revenue. This acquisition underscores the fierce competition between Databricks and Snowflake, two titans in the analytics and AI landscape. Tabular, backed by heavyweights like Altimeter Capital and Andreessen Horowitz, is renowned for its Apache Iceberg table format, making it a coveted asset in the data wars. This hefty price tag highlights the strategic value Databricks sees in staying ahead of Snowflake, especially as Snowflake grapples with a significant stock price drop and security challenges. Is this merely a high-stakes gamble, or a visionary move to solidify Databricks' dominance? #Databricks #Tabular #Acquisition #ApacheIceberg #Snowflake #TechMergers #Saasverse
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[UPDATED] Pre-IPO Stock Valuations | as of Apr 8, 2024 * NOTE: Actual price per share data for primary rounds is now included in secondary market implied valuation calculation. Material secondary market implied valuation impacts to Stripe, Databricks, Deel, Hugging Face, Snyk, Airtable, Cohere, Ramp, Neuralink. Please contact aaron.dillon at agdillon dot com with questions. * UPDATED NOTE: Stripe secondary market implied valuation updated from $94.2b to $72.5b due to a calculation error. The per share price of the $50b Mar 2023 round ($20.13) was used to calculate implied valuation off of the $65b Feb 2024 tender round. This has now been corrected in the report below.
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a growing number of stock tenders. By the numbers: Tender activity climbed 44% year-over-year in Q3 2024, according to new data from Carta, which is one of the largest startup equity and VC fund administrators. There were 26 such offers via Carta last quarter, the highest quarterly total in over two years. Zoom in: Earlier-stage companies are getting in on the act, representing about half the recent volume. That's quite different from 2021, for example, when over 80% of the offering came from companies that were Series C or later. Coming attractions: The new Carta data doesn't include the massive $1.5 billion tender that OpenAI just signed with SoftBank, which applies to current and former employees so long as they have at least two years of tenure. Nor the one announced today by Veeam. Nor the one that Databricks is said to be prepping. The big picture: This feels like venture capital exacerbating its own problem. Yes, some of these tenders help early investors get liquidity, but the real upshot is to let IPO-skittish founders stay private longer. Carta, however, views it a bit differently, pointing out that there is historical correlation between tenders and IPOs, suggesting that an IPO boom could be a year or two away. On the other hand, that history dates back to just after the Great Financial Crisis.
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Nancy Pelosi, a well-known professional insider trader, purchased Databricks stock days before they released their DBRX model, which greatly outperforms LLaMa2-70B, Mixtral, and Grok-1. https://lnkd.in/gkUd-jcn What does her investment advisory firm Harris Associates know that we don't? https://lnkd.in/g6igyrF3 A lot, apparently. https://lnkd.in/gj8ndyRK https://lnkd.in/gHzmNkrP Haris knows about the $1 million fines and 10 years imprisonment for insider trading, but I guess they are above the law. I try to stay apolitical, but the crimes and double standards of the Biden administration, the SEC, and government officials are egregious.
Nancy Pelosi buys up to $5m in Databricks stock for Big Tech portfolio
dailymail.co.uk
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