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How To Buy Databricks IPO Stock

Jimmy Khan

May 07, 2022 15:29


Databricks' revenue comes from artificial intelligence (AI) and large-scale data engineering. Continue reading to learn more about the Databricks IPO and how to acquire stocks in public businesses.

What is Databricks?

Databricks is a cloud and web-based data science and artificial intelligence software service. The startup is on a mission to assist data teams tackle the world's most complex challenges by democratizing and simplifying data and AI.

Its main product is a web-based Unified Data Platform that allows data engineers at Fortune 500 businesses to ingest large volumes of data from current sources and assemble it into business information.

Understanding corporate data improves operations and allows businesses to remain ahead of the competition.

The majority of folks aren't going to grasp what this firm performs. The central point is that data analytics will be a significant long-term trend in the following decades, and Databricks is well-positioned to ride the wave.

The world's largest data firms use its products, and it has made private investments in the company.

The original inventors of Apache Spark, an open-source data analytics engine for large-scale processing, launched Databricks. San Francisco is the company's headquarters.

When will Databricks go public?

As of this writing, Databricks has made no statement or set a timetable for an IPO; however, many experts believe the firm will go public in 2021, owing to the success of its most recent round of investment in early February 2021.

According to a Bloomberg report from October 2020, Databricks was already in the early stages of issuing shares, citing "unnamed" persons familiar with the topic. According to the individual, the business was in negotiations with investment banks at the time but had not yet recruited underwriters.


Is Databricks a Publicly Traded Company?

Databricks is still a privately held company. Founders, early investors (venture capital companies), and workers are among the stockholders.

Crunchbase maintains an updated list of Databricks investors.

Since its inception, Databricks has raised at least $3.4 billion in private capital. According to Bloomberg, Morgan Stanley led the most recent round (August 2021), infusing at least $1.5 billion and raising the company's worth to $38 billion.

Fidelity, Microsoft, Amazon, CapitalG, Salesforce Ventures, Tiger Global, Andreesen Horowitz, Blackrock, and New Enterprise Associates are notable investors.

Financial History of Databricks

Headquartered in San Francisco, The developers of Apache Spark, MLflow, and Delta Lake created Databricks in 2013 as a data and AI firm. Databricks' unified data platform is used by over 5,000 firms and organizations, including 40% of Fortune 500 corporations, for analytics, machine learning, and data engineering.

Since its inception, Databricks has received a total of $1.9 billion from 28 investors in seven critical fundraising rounds. The seven rounds of investment, as well as the investors in each round, were as follows:

On September 25, 2013, Databricks' financial history started with the first round of their series A funding, which garnered $14 million from Andreessen Horowitz and Alfred Chuang.

New Enterprise Associates, DCVC, and Andreessen Horowitz contributed $33 million to the second early-stage venture capital fundraising round of series B debt on June 30, 2014.

On December 15, 2016, the third round of late-stage venture funding for series C debt was announced. SineWave Ventures, New Enterprise Associates, and Andreessen Horowitz contributed $60 million to Databricks' $460 million valuations.

2017: On August 22, 2017, the company secured $140 million in a Series D late-stage venture capital transaction. Before this investment round, the firm was valued at $800 million.

On February 5, 2019, the fifth round of investment for series E late-stage venture capital was announced. Andreessen Horowitz, Battery Ventures, Coatue, Founders Future, Geodesic Capital, Green Bay Ventures, Microsoft, and New Enterprise Associates were among the investors who contributed $250 million. The company's pre-money value was $2.5 billion at the time.

2019: The firm disclosed its 6th late-stage venture Series F funding on October 22, 2019, raising $400 million from 11 investors. At this stage in its financing history, the company's pre-money value had risen to $5.8 billion.

Databricks' most recent round of Series G late-stage venture funding received $1 billion from 23 investors in 2021. Databricks' current round of funding resulted in a post-money value of $28 billion.


Will SPAC Buy Out Databricks?

A SPAC, often known as a blank check firm, is a special purpose acquisition company. They are shell corporations created to assist existing firms in going public without going through a typical IPO.

The SPAC firm combines with the existing business and assumes the established company's name, and a reverse merger is another name for it.

After Virgin Galactic, Lordstown Motors, and Nikola utilized SPACs to become publicly listed firms, they have become more common.

With a $28 billion value, it appears more probable that Databricks will go public through a conventional or direct offering, as Bloomberg reported on October 23 (see News section above).

The firm may avoid the costly and challenging IPO process by going public via a SPAC. SPAC's founder's contact firms like Databricks to persuade them that it's a good idea.

Because not every business is ready to go public, SPACs are an appealing alternative to an IPO, where the firm may still obtain cash.

However, the more established a firm is, the more resources it may recruit to help with the typical IPO process.

When the firm's early investors and workers want liquidity, and the company produces considerable income, the company will determine whether to go public via a standard IPO, direct IPO, or SPAC merger.

What Is The Current Price of Databricks stock?

There is no Databricks stock price since it is not quoted on a stock market.

The business and its underwriters will not provide a projected IPO price range until the Securities and Exchange Commission receive the first S-1 filing (SEC).

Potential of Databricks

Many prominent and successful money managers and venture capitalists have previously invested extensively in Databricks, as stated above in the company's funding history, and for a good reason. The Databricks Lakehouse platform, powered by Delta Lake in the cloud, enables businesses of any size to combine all of their data in one location easily.

The capacity of Databricks to exploit customer data assists its clients in better understanding their customers' operating operations. In addition, the Lakehouse platform gives the client organization a data-driven competitive edge. Databricks' "lakehouse" data management architecture quickly becomes the industry standard for simplifying data infrastructure and speeding up innovation.

The stock of Databricks and the amount of money obtained via an IPO remain a crucial deciding element for each new investor considering purchasing IPO shares.

If underwriters see substantial demand for shares, as they did with the Snowflake IPO in 2020, the price of the IPO shares might rise. Despite upping its IPO price, SNOW stock now trades for more than twice as much as it did when it first went public.

Keep in mind that after obtaining Databricks shares in the upcoming IPO, you may not be able to sell them right away. Additionally, if the offer is oversubscribed, you may have to wait until after the IPO to buy shares on the secondary market since most claims are given to underwriters and their best clients.


How to Purchase Databricks Initial Public Offering Stock

A firm requires an agent to sell its stock to the general public when it issues stock. An investment bank or a broker-dealer is usually the agency. These financial entities purchase shares from the issuing business to sell them to investors.

If you wish to acquire IPO shares, you'll need a funded brokerage account. Before you may invest in IPO shares, many online brokers need a sizeable minimum account balance. You will also be required to complete a questionnaire to fulfill your broker's different standards.

Step-by-Step Instructions:

Choose a brokerage.

Qualified consumers may participate in certain IPOs via some of the top online stock trading platforms. Each broker has its own set of standards.


Even qualified investors with accounts with the top brokers may be unable to purchase IPO shares at the original price. Depending on how popular they are and where you are on the list of eligible investors, you may also be restricted in the quantity of IPO shares you may buy.

Choose how many shares to purchase.

You may specify how many shares you wish to buy with the money in your account. Any acquired shares may be required to be held in your account for a "lockout" period of 90 to 180 days.


Once your broker has permitted you to purchase IPO shares, you must submit a "conditional offer to buy," which brokers typically begin taking one week before the IPO stock is priced. Following the determination of the first price, you may need to indicate your interest in purchasing IPO shares at that price.


The amount of stock you requested is not guaranteed, and instead, how many shares are allotted to your account is determined by your position on the eligible buyer's list. Many brokers use a scoring system to prioritize their top customers when allocating IPO stock.


Remember that you'll need to maintain IPO shares for the mandatory lockout time, so make sure you understand the IPO prospectus and any lockout provisions before making a conditional offer to acquire.

If you are told that you have been assigned IPO shares at the IPO price, they will appear in your brokerage account on the IPO day, and the requisite amount will be deducted.

What is the stock symbol for Databricks? Ticker for Databricks?

The SEC has yet to receive Databricks' public filings. As a result, the Databricks stock symbol has yet to be determined, and the only speculation is possible.

There seem to be two options accessible in the United States:


Will We recommend Databricks stock?

We won't know whether Databricks will be an Advisor suggestion until after the IPO. Databricks, on the other hand, match the usual profile of high-growth, revolutionary company strategies.

Data analytics and big data will be hot topics for the foreseeable future.

When the promotes a firm, the stock price generally rises immediately. Subscribers to the newsletter are known for being long-term investors who seldom sell, implying that the stock price will continue to grow.

In 2022, Databricks expects to generate $1 billion in revenue.

Many businesses have gone online in the last two years, which has benefited IT firms greatly. In addition, Databricks profited. Databricks' yearly recurring income will reach $425 million in 2020, up more than 75% yearly. Furthermore, regular annual revenue increased to $600 million in 2021.

The COVID-19 epidemic, according to sources, piqued organizations' interest in cloud-based analytics.

According to one investor, the firm is on target to exceed $1 billion in sales by 2022. According to Pete Sonsini, companies hurried to evaluate their data on the cloud, who joined Databricks' board in 2014.

They picked up speed during the epidemic. We put money into Databricks when they had no software sales, and they'll make around $1 billion in GAAP revenue next year... There may be more.

However, potential Databricks IPO investors will want to understand the margins associated with that number. So yet, no information has been released. On the other hand, the corporation was recently valued at $38 billion, and the statistic has investors believing a Databricks IPO is imminent.

Databricks Is Valued At $38 Billion.

Databricks reported that it had secured $1.6 billion in a Series H round at the end of August. The corporation was valued at $38 billion after the investment round, and Databricks was valued at $28 billion only seven months after receiving a $1 billion Series G fundraising round. In other words, Databricks boosted its value by $10 billion in only seven months.

With $425 million in sales, Databricks' most recent fiscal year concluded in September 2021. This is a 75 percent raise over the previous year. Databricks, on the other hand, do not provide profitability numbers. As a result, it's unclear if the business is profitable. Furthermore, any profitability estimates that may exist are hypothetical.

Databricks was valued at $38 billion after its Series H fundraising round. "This fresh investment reflects the quick adoption and amazing customer demand we're experiencing for the Databricks Lakehouse Platform and reaffirms industry and investor trust in our vision – that lakehouse is the future data architecture," said Ali Ghodsi, co-founder and CEO. This is the start of an exciting new chapter for us, enabling us to accelerate our pace of innovation and invest even more in the success of data-driven companies on their way to the lakehouse."

Investors have contributed about $3.6 billion to the firm. Furthermore, Amazon (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), Alphabet (Nasdaq: GOOG), and Salesforce (Nasdaq: CRM) have all backed the firm (NYSE: CRM). Furthermore, investors are betting on a Databricks IPO after the most recent capital increase.

So, how much money may Databricks raise in its IPO? Let's look at the specifics of the submission.

Databricks IPO Information

A Databricks IPO has investors on the edge of their seats. Furthermore, although an IPO isn't inevitable, it's expected to happen in 2022. According to Reuters, Ghodsi attempted to quell concerns caused by the investment round by noting that the current game "does not push off the IPO."

Ghodsi, on the other hand, hinted about going public in a February interview with CNBC. Ghodsi didn't say if the Databricks IPO would be a standard IPO or a direct listing at the time. He did, however, imply that the corporation was exploring a direct listing. This development follows the SEC's recent announcement of a new rule allowing firms to solicit capital while directly listing.

Ghodsi, on the other hand, was keen to point out that a typical IPO offers one significant advantage. The firm may pick its new shareholders in a traditional IPO, and this might be more profitable in the long run since the firm is searching for long-term investment.

In conclusion, how investors may get Databricks shares remains uncertain, and Ghodsi did declare that the business would not go public via a SPAC.

Ghodsi also said in a recent August interview with Protocol, "We're coming public six months at a time." When you go public, you usually want to make sure you acquire long-term investors. [Right now, we're assigning large chunks of allocations to significant mutual funds and other investors."

Ghodsi provided an update on the Databricks IPO a few months ago. However, we may expect to hear more about Databricks stock shortly.


Should You Invest in Databricks?

Analysts compare Databricks' IPO prospects to those of Snowflake, a software startup that went public in late 2020 and it was the world's biggest software IPO.

Enterprise software is a massive, rapidly expanding sector with room for innovation. According to Statista, the worldwide corporate software industry is anticipated to be valued at $517 billion, with total IT expenditure reaching $4.07 trillion.

Databricks is a forward-thinking startup that has the potential to assist numerous areas of the IT industry. And, unlike Snowflake, investors have a better chance of getting into this stock.

Robinhood's IPO Access service for regular investors was just launched, as we all know. This is a once-in-a-lifetime chance for ordinary investors to purchase equities at IPO pricing.

This will be a must-buy if Robinhood picks up Databricks IPO shares and makes them accessible on IPO Access.

Snowflake was valued at $120 before its first public offering, and the stock is now trading at $240. Because it's been pretty flat since the stock's launch at $253, we can confidently claim that it is priced in its fundamentals.

What was the difference between the IPO price of $120 and the opening price of $253? Insiders have the opportunity to purchase equities before they become public. If many insiders seek shares, the price soars shortly after the IPO. When the euphoria goes off, equities often plummet back down.

Snowflake is a promising software firm in a growing sector. Thus this did not happen.

In the same field, Databricks is now a viable software firm. The difference now is that IPO shares are more likely to be available via Robinhood.

Databricks just concluded a Series G fundraising round, and we received an update on the company's growth. Around $1 billion was raised, and the funds will be used to support Databricks' innovation and worldwide expansion.

According to reports, Amazon Web Services, Salesforce, and Microsoft were among the major investors. This business has everyone in the tech industry thrilled.