Databricks Might Delay IPO
There are signs that Databricks is not planning for an IPO anytime soon. The company plans, according to The Information, a major cash raise to help employees cash out restricted stock units set to expire in 2026.
The Information reports that Databricks, led by Swedish-Iranian co-founder and CEO Ali Ghodsi, is considering raising several billion dollars in the coming months to allow more employees to sell shares. According to a source, the company has discussed raising funds at a valuation of $55 billion or more—a significant increase from its last valuation of $43 billion. This move would provide liquidity for employees indicating that Databricks, despite rumors of the opposite, may not be planning to go public anytime soon.
Since the restricted stock units were issued in 2019, their value has surged with rising interest in AI. Now, with these RSUs nearing expiration, employees have few options for liquidity and, in some cases, might have turned to high-interest stock loans for cash.
If Databricks proceeds with the cash raise, it would follow a path similar to that of Stripe, another major private tech firm, which raised $7 billion last year to buy out expiring RSUs and cover related tax obligations. Private tech companies like Databricks often face pressure to go public or raise funds when employee RSUs approach expiration, as seen when Airbnb opted for an IPO under similar circumstances in 2020.
Founded in 2013, Databricks sells data management software that has become increasingly valuable as businesses adopt AI-driven solutions. The company is now one of the world’s most valuable private tech firms.