Databricks wanted $1B, got flooded with $15B in offers — and settled on $5B at $190B valuation
Databricks, the AI and big-data analytics company, has closed a $5 billion funding round — even though it originally set out to raise just $1 billion. Co-founder and CEO Ali Ghodsi explained the unusual chain of events to TechCrunch.
The trouble began in June, when The Information published a story claiming Databricks was raising a massive round. The article landed right in the middle of the company's own conference, when the team was fully focused on the event and not thinking about fundraising at all.
"As soon as that article went out, there was a long line of investors that started calling. My phone blew up. It was like the worst timing for us because we were busy with our conference," Ghodsi recalled.
What followed was an enviable problem: the news report turned into a self-fulfilling prophecy. Interest in the deal was overwhelming. Even after narrowing the field to a select group of investors, the company saw $15 billion in potential commitments.
Saying no to that much demand — especially from long-time backers who had supported Databricks through its journey — would have created hard feelings in the venture community. So the company made a pragmatic choice: issue more shares than originally planned and let more investors in.
In July, Databricks announced it had closed the round at a $188 billion valuation, though it did not disclose the amount raised at the time. On Thursday, the company revealed the final numbers: $5 billion in new capital from a deliberately limited set of VCs, with the valuation now standing at $190 billion.
Ghodsi described the situation as a case where media attention created its own momentum. The initial report sparked a frenzy of inbound interest, which in turn forced the company to expand the size of the round far beyond what it had intended. Instead of a quick $1 billion raise, Databricks ended up with a $5 billion infusion — a result that few startups would complain about, even if the process was chaotic.
