KEY POINTS
- Databricks, a privately held company, specializes in AI and data analytics through its Lakehouse platform.
- According to its CEO, Databricks, though not publicly traded, may consider an initial public offering (IPO) after the market improves.
- Investors can invest indirectly through platforms like EquityBee or Fundrise Innovation Fund.
Databricks stands out as a highly reputable startup, known for its innovative Lakehouse platform. The platform makes it easy for businesses to access and analyze data, enabling rapid company expansion.
The Lakehouse platform operates in the cloud, delivering data to scientists and analysts. It allows businesses to securely store their data on third-party cloud servers such as Amazon Web Services (AMZN 0.41%). With the growing demand for artificial intelligence (AI) solutions, more companies are turning to Databricks’ platform.
With the rapid development of AI technology, Databricks is poised for significant growth in the future. This potential has attracted keen interest from investors eager to acquire its shares.
Here’s a guide to investing in Databricks and key factors to consider when evaluating a company.
What is DataBricks?
Founded in 2013 and headquartered in San Francisco, Databricks is an analytics company specializing in artificial intelligence (AI). The company pioneered a “lake house” architecture for managing data on the cloud. In this system, “lakes” refer to vast amounts of data, while “warehouses” refer to structured, processed data, operating like efficient, online factories. This digital powerhouse, constructed by Databricks, is for lease.
Databricks operates in 12 countries, some with multiple offices, and its partners include leading firms such as Amazon, Google, Microsoft, and Alibaba.
Recently, CNBC ranked Databricks on the “CNBC Disruptor 50” list from No. 37 to No. 34 in 2021.
In August 2021, Databricks announced that it had generated $600 million in annual recurring revenue (ARR), a 75% year-over-year increase. As of February 2022, TechCrunch reported that its ARR had reached $800 million, putting it on track for $1 billion.
In October 2021, Databricks acquired German no-code company 8080 Labs for an undisclosed sum, cementing its position as a leader in no-code and low-code solutions that connect non-technical professionals with AI. Enables the use of active data management technology.
When is DataBricks’ IPO date?
Despite the market recovery in 2023, the company has yet to announce an IPO date. However, this IPO could reasonably be expected to happen by 2024. The current bear market in the S&P 500 could have an impact on this timeline because IPOs are less common in extended downturns.
The IPO of Fanatic is eagerly awaited due to its explosive growth, which saw it reach a valuation of $43 billion in just eight years. Investors, however, will have to exercise patience as the private startup plans “six months at a time” in a cautious manner.
Its major investors include:
- Counterpoint Global (of Morgan Stanley)
- Baillie Gifford
- ClearBridge Investments
- Andreessen Horowitz
- BlackRock
- Canada Pension Plan
- Fidelity
- Franklin Templeton
An advanced list like the one above indicates that it benefits from important advice and guidance. Additionally, it has no immediate need for cash, especially given the support it receives from all four leading cloud providers: Amazon, Google, Microsoft, and Salesforce.
How do you buy Databricks stock?
- Wait for the IPO: Databricks may go public in the future. When this happens, you will be able to buy shares through a brokerage account.
- Venture Capital Funds: Invest in funds that have stakes in DataBricks.
- Secondary Markets: Use platforms like SharesPost, Forge Global, and EquityZen to buy shares in private companies (accreditation is usually required).
- Public Companies: Invest in publicly traded companies that have invested in DataBricks.
- Stay informed: Follow news and updates about Databricks’ IPO plans.
- Mutual Funds or ETFs: Find funds or ETFs with indirect exposure to Data Bricks through venture capital investments.
Is DataBricks publicly traded?
Until mid-2024, Databricks remained a privately held company, meaning investors could not buy its shares through the stock exchange using brokerage accounts.
Can I buy Databricks stock?
No, you cannot currently buy Databricks stock because it is a private company.
Will DataBricks have an IPO?
As of mid-2024, Databricks had not scheduled an initial public offering (IPO). A Wall Street Journal article from early 2024 indicated that the company was waiting for better market conditions before moving forward with an IPO. At the time, Databricks’ CEO commented that “markets seem pretty closed.”
Previously, Databricks had considered going public and was heading for an IPO in 2021 after its latest private funding round. This period was seen as one of the best due to intense investor interest in tech startups. However, with existing investor enthusiasm for IPOs waning, the company may choose to remain private until market conditions improve for IPOs.
How to invest in DataBricks Stock
Although Databricks is not publicly traded, some investors can still participate in its growth potential through secondary platforms such as EquityBee or Forge Global (FRGE -2.92%). These online platforms cater to accredited investors—individuals with substantial net worth or income—who seek investment opportunities in venture capital-backed startups.
At EquityBee, accredited investors can support employee stock options when a company goes through a liquidity event such as a sale or IPO. Databricks is one of the main investment options on the EquityBee platform.
You can invest in Databricks through the Fundrise Innovation Fund, which is open to all investors and requires a very small investment (around $10 per share). The fund has several pre-IPO companies, including Canva, Aniscal, Anthropic, and OpenAI, along with Databricks.
what is Databrick’s stock symbol?
As of now, Databricks is a privately held company and does not have a stock symbol as it is not publicly traded on any stock exchange. If Databricks goes public in the future, it will receive a stock symbol on its initial public offering (IPO).
Alternative options to investing in DataBricks Stock
Here are a few alternative investment options for non-accredited investors interested in gaining exposure to the rapidly expanding cloud data sector before Databricks goes public with its IPO. You have the opportunity to invest in a publicly traded database company that competes directly with Databricks.
- Snowflake (SNOW 3.96%): Snowflake’s data cloud allows users to store, process, and analyze data more quickly, easily, and flexibly than traditional solutions.
- MongoDB (MDB 6.14%): MongoDB is a type of document database that offers a flexible approach, allowing clients to start developing applications without spending time configuring their database.
Should I invest in DataBricks stock?
Although Databricks is not yet open for most investors to invest in, here are some factors to consider before deciding to invest in the company after it goes public.
Is DataBricks stock profitable?
Databricks, being a private company, is not required to share its profitability status publicly. As of mid-2024, there is still no information available on whether the company is profitable.
Perhaps, Databricks had yet to turn a profit. According to a late 2023 article in The Stack, profitability remained low for the company despite its impressive $1.5 billion in annual revenue at the time. While revenues were growing strongly at 50% year-on-year, the company focused on making substantial investments to expand its operations.
DataBricks’ Revenue For Best Investment
Databricks achieved an annual recurring revenue (ARR) run rate exceeding $1.6 billion in 2023, a significant milestone. The company’s revenue has grown rapidly, increasing by 50 percent in the past year alone.
Looking ahead, Databricks is poised to maintain its strong revenue growth. The company has secured major deals with technology firms, such as a notable $1.3 billion deal with generative AI startup MosaicML.
When will Databricks stock go public?
So far, Databricks has not announced a specific date for its IPO. The company has expressed interest in going public, but no concrete timeline has been provided. To stay updated, follow financial news, official announcements from Databricks, and updates from company executives.
DataBricks’ Finance Valuation
Databricks secured its latest round of funding from private investors in September 2023, raising $500 million and valuing it at $43 billion. This is a $5 billion increase from its previous funding round in 2021.
ETFs with exposure to DataBrick Stock
Exchange-traded funds (ETFs) offer a convenient way to passively invest in companies without directly owning their shares. However, because Databricks is not publicly traded, investors cannot use an ETF to gain exposure to Databricks stock.
Nevertheless, investors can still leverage ETFs to take advantage of market trends like data bricks. Here are two ETF options to consider:
- Spear Alpha ETF (NYSEMKT: SPRX): This ETF focuses on companies that are positioned to take advantage of emerging technology trends, such as AI. It has notable investments in the likes of Snowflake and Nvidia (NVDA 0.25%), the latter of which is invested in Databricks. The ETF’s expense ratio is 0.75%.
- TrueShares Technology, AI & Deep Learning ETF (LRNZ 0.64%): The fund targets companies it sees as leaders in innovative AI and deep learning technologies. It includes Snowflake and Nvidia as two of its major investments. The ETF’s expense ratio is 0.69%.
FAQ on investing in DataBrick stock
Can I buy shares of Databricks?
You cannot purchase shares of Databricks through your normal brokerage account. However, accredited investors—those with substantial income or net worth—can access pre-IPO shares of companies like Databricks through platforms like EquityBee or Forge Global.
Moreover, the Fundrise Innovation Fund offers an investment opportunity to anyone. This venture capital fund focuses on pre-IPO companies, including Databricks, with a minimum investment requirement of around $10 per share.
Should I invest in Databricks?
Databricks is currently privately held, so its stock is not available for investment. However, if the company goes ahead with an IPO, it could present a promising investment opportunity. Databricks is experiencing rapid revenue growth, often linked to strong investment performance.
Is Databricks publicly listed?
As of mid-2024, Databricks is a privately held company, which means its shares are not available for purchase on the stock market through a brokerage account. The company has not yet announced the date of its initial public offering (IPO).
How much is Databricks’ IPO worth?
Databricks didn’t go public until mid-2024, so the exact price of its IPO is unknown.
Nevertheless, the company raised new funds from investors in September 2023 at a valuation of $43 billion, up $5 billion from its 2021 valuation. It is expected to command an even higher price when it finally goes public.
Is Databricks going to IPO?
Databricks aims to eventually go public. However, with the IPO market largely closed to startups in mid-2024, the company plans to postpone its IPO until market conditions improve.
Final words for investing in DataBrick stock
Databricks is gaining attention as a promising company. The widespread adoption of Lakehouse for data management is driving its revenue growth, particularly in AI applications. The upcoming IPO of the company is eagerly awaited.
Potential investors have the advantage of being able to thoroughly analyze Databricks before it goes public. They can also compare it to established competitors like Snowflake and MongoDB, which are already publicly traded, growing rapidly, and approaching profitability. These competitors could potentially offer better long-term investment opportunities, especially if DataBricks starts at a higher price.
