{"id":25833,"date":"2021-08-19T11:52:06","date_gmt":"2021-08-19T11:52:06","guid":{"rendered":"https:\/\/rbsitsoftwaresolution.com\/blog\/would-the-math-work-if-databricks-were-valued-at-38b.html"},"modified":"2021-08-19T11:52:06","modified_gmt":"2021-08-19T11:52:06","slug":"would-the-math-work-if-databricks-were-valued-at-38b","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/would-the-math-work-if-databricks-were-valued-at-38b.html","title":{"rendered":"Would the math work if Databricks were valued at $38B?"},"content":{"rendered":"

Databricks<\/a>, the open-source data lake and data management powerhouse has been on quite a financial run lately. Today Bloomberg reported<\/a> the company could be raising a new round worth at least $1.5 billion at an otherworldly $38 billion valuation. That price tag is up $10 billion from its last fundraise in February<\/a> when it snagged $1 billion at a $28 billion valuation.<\/p>\n

Databricks declined to comment on the Bloomberg post and its possible new valuation.<\/p>\n

The company has been growing like gangbusters, giving credence to the investor thesis that the more your startup makes, the more it is likely to make. Consider that Databricks closed 2020 with $425 million in annual recurring revenue, which in itself was up 75% from the previous year.<\/p>\n

As revenue goes up so does valuation, and Databricks is a great example of that rule in action. In October 2019, the company raised $400 million<\/a> at a seemingly modest $6.2 billion valuation (if a valuation like that can be called modest). By February 2021, that had ballooned to $28 billion, and today it could be up to $38 billion if that rumor turns out to be true.<\/p>\n

\n

Databricks raises $1B at $28B valuation as it reaches $425M ARR<\/a><\/p>\n<\/blockquote>\n

\n

One of the reasons that Databricks is doing so well is it operates on a consumption model. The more data you move through the Databricks product family, the more money it makes, and with data exploding, it\u2019s doing quite well, thank you very much.<\/p>\n

It\u2019s worth noting that Databricks\u2019s primary competitor, Snowflake went public last year<\/a> and has a market cap of almost $83 billion. In that context, the new figure doesn\u2019t feel quite so outrageous, But what does it mean in terms of revenue to warrant a valuation like that. Let\u2019s find out.<\/p>\n

Valuation math<\/h2>\n

Let\u2019s rewind the clock and observe the company\u2019s recent valuation marks and various revenue results at different points in time:<\/p>\n