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-- 79.080 Pre-IPO pedia | Could big data unicorn Databricks become another Snowflake?
Databricks, thought to be one of highest-valued private companies in existence, is still planning an initial public offering and is reported to go public in 2022.
Databricks, founded in 2013 and headquartered in San Francisco, provides tools to help companies glean insights from large amounts of information.
Databricks is known for a wide range of open-source data engineering and machine-learning tools.
Databricks' first product, also one major product, the Apache Spark, gained notoriety as a top open-source analytics engine. It got popular enough that the company continues to offer courses and conferences for the software.
Databricks operates in over 12 countries worldwide with an international reach of more than 5,000 organizations. Over 40% of the Fortune 500 use Databricks’ platform.
Bill Dague, Nasdaq alternative data head, states in an interview: “We do have a lot of very large data that historically has been really hard to process, and Databricks allows us to share and manage access to very, very large data sets without having to move them in really inefficient ways.”
The software vendor has already begun selling industry-specific products, following in the footsteps of companies like Snowflake, Microsoft, Salesforce and others that are increasingly tailoring their tools to sectors like retail and health care.
Nowadays, Databricks launched a new offering targeted at the financial services industry. Among other uses, the product is aimed at helping businesses like Nasdaq bring the vast amount of customer transaction information stored over decades of operations into one common repository to improve functions like fraud detection.
$Snowflake (SNOW.US)$ IPO was the biggest software IPO in history. Many in the media marveled at how its $70 billion valuation made the software unicorn the priciest newly listed player ever, while its annual sales running at just $500 milliom.
Its performance also surprised many investors. Snowflake soared more than 110% in its market debut and valued at more than $80 billion in the first day of trading.
As investors clamor to find the next blockbuster IPO in the data analytics sector after Snowflake Inc.’s historic 2020 offering, some suggest it will be Databricks.
The company said that it ended 2021 with more than $800 million in annual recurring revenue, more than an 80% jump year-over-year. By comparison, Snowflake had an estimated $530 million in ARR when it went public in 2020.
Databricks said it has more than 7,000 customers and a net retention rate (the percentage of recurring revenue from existing customers) of higher than 150%, which is significantly more than the industry average for pre-IPO software vendors.
According to a report from Bloomberg, the potential for Databricks’ market will reach an estimated $130 billion by 2025.
The company has raised $3.5 billion and commands a $38 billion valuation up till now. It is the ninth-most valuable startup in the world, according to research firm CB Insights.
This valuation came just seven months after a $1 billion Series G funding that landed Databricks a $28 billion valuation. In other words, in just seven months, Databricks increased its valuation by $10 billion.
While a Databricks IPO date is yet to be confirmed, founder Ali Ghodsi has repeatedly said the company is making preparations.
They're taking steps, slowly but surely. But when the time comes, it will go by like a flash.
Volatility in the stock market “doesn’t affect IPO timing,” Ghodsi said in an interview. “We’re not in a super hurry to IPO. We’re not pushing it out or anything like that. We’re on a long journey.”
Mooers, what's your opinion of this big data giant? Will you buy-in the AI-driven company after it goes public?
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Riding the IPO wave, and find the new bull!
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Pistol_Whiped : Well then I’d imagine so.