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Insight VC Describes Databricks’ Wild $10B Deal and the Bad Advice the CEO Ignored
In a recent interview, George Mathew, Managing Director at Insight Partners, shed light on the wild ride that led to Databricks’ record-breaking $10 billion fundraise. The deal saw six firms, including Insight and new investor Thrive, come together to make this monumental transaction possible.
“It’s been a wild week for investors clawing their way into Databricks’ record-breaking $10 billion fund raising,” Mathew said with a grin, emphasizing the sheer scale of the deal. “There were calls that went well late into the night, and that’s okay, that’s how good opportunities emerge.”
As one of the key players in this transaction, Insight Partners had already been involved with Databricks for some time. In fact, it was Mathew who provided advice to CEO Ali Ghodsi when he initially expressed interest in venturing into the data warehousing market.
Mathew recalled a conversation with Ghodsi where the latter mentioned his plans to enter this space. “I just said, ‘That’s the stupidest idea I’ve ever heard’,” Mathew laughed. However, it turned out that he was wrong, and Databricks’ launch of its SQL product in 2020 marked a major turning point for the company.
Fast forward to the end of 2024, and the data warehousing landscape has undergone significant changes. The rise of Large Language Models (LLMs) has created an insatiable demand for high-quality enterprise data. In this context, Databricks’ SQL product has become a critical component for serving these models.
“When I saw that Ali was going to go after this market, I was thrilled,” Mathew said, acknowledging the mistake he had made earlier. “Where is this high-quality data coming from? For the enterprise, it’s going to come from a place like Databricks.”
The company’s strategy has clearly paid off, with Databricks announcing that it will be on a $3 billion revenue run rate by the end of its fiscal fourth quarter. This represents a staggering 150% increase in revenue for the year.
Databricks’ remarkable journey serves as a testament to the importance of perseverance and staying true to one’s vision. It is clear that the company’s leadership has made deliberate decisions, defying conventional wisdom at times, which have ultimately led to its meteoric rise.
The interview with Mathew provides valuable insights into the inner workings of Databricks’ success story. As it continues to push the boundaries of innovation and growth, this deal serves as a reminder that even the most experienced professionals can be wrong, but still learn from their mistakes.
Source: techcrunch.com
