When can we expect the Databricks IPO?

A Databricks IPO has been on radars for years, but the big data and artificial intelligence (AI) firm has continued to hold off listing. Now standing as one of the most valuable pre-IPO technology companies with a $43 billion valuation, the firm stands out as a disruptor to the traditional data warehouse industry.

Firms tapping capital markets in 2024 have typically done very well, and out of the public eye, Databricks has been having it's own successes operationally that may help the firm to even greater valuations when they do finally list.

The company, which specializes in a comprehensive AI deployment platform, has made significant advancements with its proprietary tools including Large Language Models (LLMs) designed to enhance customer capabilities in developing and deploying AI applications.

The company's journey to this point has been fueled by an impressive injection of capital, totaling around $4 billion. This sizable venture capital funding demonstrates a robust confidence by investors in Databricks' vision and strategic direction. At the core of Databricks' offerings is an advanced analytics platform that takes on big data and AI tasks, an essential need in today's ever-growing and complex data landscape.

In a competitive field where cloud hyperscalers reign, Databricks stands its ground against giants such as Amazon's AWS, Microsoft's Azure, and Google Cloud. Analysts from Roth MKM compare Databricks' product suite to AWS' Bedrock and GCP's Vertex AI, highlighting the company's competitive edge and its unique position in the market.

Underscoring its growth and market adoption, Databricks announced during a recent event that their platform is used by over 1,500 companies for training transformer models. They also reported a 25% month-over-month growth in GPU usage over several months, signaling a rapidly growing demand for their services.

Despite its exponential growth and marked success among enterprises, Databricks is expected to remain private for the foreseeable future. The firm is thought to be unlikely to launch an initial public offering (IPO) prior to mid/late 2025 so there is runway to build. Such a strategic manoeuvre allows the company to continue honing its technologies and expand its market presence without the immediate pressures and scrutiny that come with being a public entity.

Whilst the companies position as one of the most valuable pre-IPO technology companies reflects its strong product offering, market need for advanced AI and big data solutions, and the success of its business strategy, there remains no firm date on a listing, but it could still be some way off.