8 hours Ago By By Troy Wolverton | Examiner staff writer |
Huge sums of money continue to flow into the artificial-intelligence industry, and specifically to San Francisco-based startups. Databricks announced Tuesday it had already raised $8.6 billion for its Series J financing out of a targeted tally of $10 billion.
Meanwhile, Bloomberg reported Wednesday that Perplexity AI closed a $500 million venture round earlier this month at a $9 billion valuation . Both businesses operate in the burgeoning AI sector. Databricks offers data storage and analysis services that are customized for AI companies.
Perplexity offers an AI-powered search engine that operates like a chatbot, attempting to offer direct answers to users’ questions, rather than returning a list of links. Until recently, Perplexity’s round likely would have been one of the biggest of the year. But the surge of interest and investment in AI over the last two years has led to a series of billion-dollar venture deals , such as that being raised by Databricks.
Should that company hit its funding target, Databricks’ round, which values it at $62 billion, would tie with OpenAI’s from January 2023 for the second-largest venture financing ever, according to data from PitchBook. Only Juul’s $12.8 billion deal in 2018 was larger.
Databricks, which was founded in 2013, said it plans to use part of the money it’s raising to repurchase shares from past and present employees. Traditionally, startup employees have had to wait until their company goes public to cash in their shares. But with few initial public offerings in the tech sector over the last three years, startups have increasingly been turning to investors in private markets to buy shares from their employees.
The new funding round would bring to $14 billion the total amount Databricks has raised, according to PitchBook. In addition to buying up employee shares, the company plans to use its new funds on marketing, developing new AI products and acquisitions, it said in a press release. Thrive Capital, an investment firm headed by Joshua Kushner, led the deal.
Kushner is the brother of Jared Kushner, the son-in-law of President-elect Donald Trump. Databricks “has emerged as the platform of choice,” Kushner said in the press release. “We .
.. consider it an honor to be partners with the company for the long term.
” Thrive representatives did not immediately respond to a request for comment about the investment. Andressen Horowitz, Insight Partners, DST Global, WCM Investment Management and GIC co-led the round, according to Databricks. Despite the extraordinary size of the deal, Databricks had more investors interested in investing in the round than it could accommodate, CEO Ali Ghodsi said in the press release.
“We ...
are super excited to bring on some of the world’s most well-known investors who have a deep conviction in our vision,” Ghodsi said. Databricks representatives did not immediately respond to a request for comment about the new funding round. For Perplexity, its new funding round is reportedly the third it has closed this year.
It raised a $73.6 million Series B round in February, according to the company. It raised another $250 million in part from SoftBank’s second Vision Fund in June at a $3 billion valuation, according to Bloomberg.
Institutional Venture Partners led the company’s latest round, Bloomberg reported. It was unclear from the report how the startup plans to use its new funds. Perplexity spokeswoman Sara Platnick declined to comment on the new financing.
IVP representatives did not immediately respond to a request for comment. If you have a tip about tech, startups or the venture industry, contact Troy Wolverton at [email protected] or via text or Signal at 415.
515.5594..
