Databricks announced a $1 billion round of funding today Feb. 1 that raises the valuation for the data management vendor to a frothy $28 billion.
The new Series G round of funding was led by Franklin Templeton, and other high-profile venture funding organizations including the Canada Pension Plan Investment Board, Fidelity Management & Research LLC, AWS, CapitalG (Google parent company Alphabet's venture arm) and Salesforce Ventures.
The San Francisco-based vendor is one of the leading contributors to the open source Apache Spark SQL query engine and is leading developer of the open source Delta Lake cloud data lakehouse technology. The goal of a data lakehouse is to bring together cloud data lake technology with the benefits of a data warehouse.
Analysts see the Databricks fundraising as helping to highlight the value that cloud data lakes and the lakehouse concept provide. Databricks Unified Data Analytics Platform is a cloud data lake-focused system.
"The Databrick valuation emphasizes the way the market is embracing the cloud," said Dave Menninger, SVP and research director at Ventana Research. "As the creators of Apache Spark, they ignored the on-premises opportunity and focused solely on the cloud and I guess they were right."
Hyoun Park, CEO and chief analyst at Amalgam Insights, also said he sees the $1 billion funding round as a strong vote of confidence in Databricks' approach.
Hyoun ParkCEO and chief analyst, Amalgam Insights
"This investment round reflects confidence in Databricks' strategy and ongoing prospects," Park said. "It's notable that there is a lot of smart money involved in this round, including partners such as Salesforce and Amazon, as well as funds that have prior experience investing in data and analytics."
Park added that the new financing comes as the future of data is becoming increasingly varied and difficult to manage. Park also said the successful commercial future for Databricks is clear to investors seeking to enter the market with a potential IPO that could happen as soon as later this year.
Investor interest in cloud data lake and lakehouse technologies
The Databricks financing is the latest in a flurry of financial activity in the data management space in 2021, with technologies that are often seen as direct rivals to Spark.
On Jan. 6, Starburst revealed a $100 million round of funding to advance the use of the open source Trino SQL data query platform, formerly known as PrestoSQL.
Also on Jan. 6, Dremio made public a $135 million round of funding to help advance its cloud data lake engine efforts. Dremio is building out a cloud platform that uses multiple open source projects, including Apache Arrow, to enable organizations to benefit from cloud data lakes.
On the horizon is the Apache Iceberg project, which has a growing community of users, including Netflix, Apple, Expedia and Adobe. Iceberg is also a rival to Databrick's Delta Engine and lakehouse models.