🤑 26 February 2024: Databricks

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Databricks

Blurb: We’re excited to launch this opportunity to invest in Databricks, the fast-growing AI and data company used by enterprises to unify their data, analytics and AI. Databricks is poised to ride the global AI wave ($1.6T market by 2030). The company's platform allows data teams to store and safeguard data, generate analytics and insights, and power the development of AI models. Databricks achieved a $1.9B Annual Recurring Revenue (ARR) in 2023, growing at 50% annually, and is backed by a16z and Nvidia.
We’re being offered preferred shares at $67/share, this is a 9% discount to their Series I in September 2023 ($73.50/share or $43B), and an upcoming employee tender anticipated to be at $73.50/share.

Highlights:

  1. $1.9B ARR in 2023 with a huge 50% annual growth rate at this scale.

  2. Gross margins are high at 85%.

  3. Outperforming top competitors: based on Snowflake’s last quarter results, Databricks is outperforming Snowflake on growth (50% vs 30%), margins (85% vs 77%), and net revenue retention (150% vs 135%).

  4. After investing in Databricks, Nvidia CEO Jensen Huang said “Enterprise data is a goldmine for generative AI”. Databricks is at the forefront of generative AI for enterprises.

  5. With its acquisition of MosaicML and partnerships with Microsoft and Nvidia, Databricks is building an ecosystem that empowers companies to harness their own data for model training, providing a strong alternative to OpenAI’s closed models.

  6. Databricks is widely viewed as a top IPO candidate. Liquidity is expected soon as the IPO market is resuming.

Deal Stage: Secondary
Share price: $67/share
Share class: Pref shares #1
Minimum Ticket: £5.000
Our allocation: £1M (first-come, first-served basis)
Fees: 8% fee + 20% carry
Co-Investors: a16z, Nvidia, Amazon Web Services (AWS), Microsoft, AT&T Ventures, Blackrock.

This will be considered a soft commitment. Upon submission, your details will be forwarded to the fund managers overseeing the deal. They will then provide you with the deal memo, deal sheet, and all necessary information for you to thoroughly research this investment opportunity. Once you are satisfied, you can submit your hard commitment directly to the fund managers, who will then secure your participation in the deal.