How to invest in Databricks pre-IPO
While generative AI can create a limerick in the style of Shakespeare or an image of a cat on Mars, most businesses and investors aren't focused on these quirky applications of the technology. Instead, they want to see down-to-Earth ways that AI can improve operational efficiency to cut costs, generate sales ideas to grow revenue, improve compliance reporting, and other clear business benefits.
One company that's been riding the AI wave, while rooted in practical applications like the aforementioned, is Databricks.
Yet rather than offering AI analytics tools, Databricks more so provides the foundation for organizations to store, manage, and assess their data, including by building, testing, and deploying AI models within the software.
Thanks largely to AI demand, Databricks has seen 60% year-over-year growth and expects to cross $3 billion in revenue run-rate by the end of January 2025. The company also projects it will be free cash flow positive by then.3
Amidst this growth, Databricks has raised huge funding rounds, including its most recent announcement of a Series in December 2024. Once finalized, this over-subscribed round will raise $10 billion, led by Thrive Capital, and value Databricks at $62 billion.4
The funding will enable Databricks to invest more in areas such as AI, while also providing liquidity to current and former employees. While Databricks did think about conducting an IPO, the company decided it would be wiser to wait until at least 2025 to go public.
So, this Series J could give some employees an opportunity to cash out early, and it has also sparked interest in the stock within private marketplaces such as Forge.
As such, pre-IPO investing in Databricks could be heating up. While most pre-IPO investing is limited to accredited investors, retail investors may also be able to gain some exposure to Databricks.
Here, we'll take a closer look at how to invest in Databricks stock pre-IPO.
Databricks: Company background
Databricks, based in San Francisco, started in 2013 with a platform built on top of Apache Spark, with the goal of making it easier and faster to analyze Big Data. Most of the company's seven co-founders have backgrounds as the original architects of Apache Spark, along with pioneering the lakehouse architecture that Databricks is known for, which combines elements of data lakes and data warehouses.5
Today, the company has expanded its focus to also include more unified areas of data management and analytics, such as by offering data storage solutions and making it accessible for users to develop and run AI models within the platform.6
Early investors included Andreessen Horowitz, which led its Series A,7 followed by New Enterprise Associates leading its Series B. Later, large asset managers such as T. Rowe Price and Morgan Stanley joined in, along with tech companies such as Microsoft, Amazon Web Services, and Nvidia.8
Databricks has also made some notable acquisitions recently, including buying MosaicML in 2023 to help expand generative AI access,9 as well as buying data management company Tabular in 2024, in a move that seemingly preempted rival Snowflake from acquiring that business.10
Databricks stock and funding history
Databricks has had ten primary funding rounds, starting with its Series A in 2013, raising $14 million at a price per share of $0.26. The round, led by Andreessen Horowitz, valued Databricks at $48.68 million.11
In 2014, its stock price more than quadrupled to $1.12, in a Series B led by New Enterprise Associates.12 That round raised around $34 million at a valuation of around $250 million.13
In 2016, the Databricks Series C took the stock price to $1.97,14 with the round again led by New Enterprise Associates,15 followed by a Series D led by Andreessen Horowitz in 2017 that brought the stock price to $2.79,16 implying a valuation of nearly $1 billion.17
In 2019, Databricks' stock price more than doubled to $7.10,18 with this Series E round again led by Andreessen Horowitz but also including investors such as Microsoft and Coatue Management.19 Later that year, the company's stock price again more than doubled to $14.32 with a Series F,20 once more led by Andreessen Horowitz but also bringing in large asset managers such as BlackRock, T. Rowe Price, and Tiger Global Management.21
The company then took a huge leap forward by raising over $1 billion for its Series G in 2021, led by Franklin Templeton,22 valuing Databricks at $28 billion and a $59.12 stock price.23 Later that year, the Databricks Series H raised $1.63 billion, bringing the stock price to $73.4824 in a round led by Morgan Stanley's Counterpoint Global.25
In 2023, Databricks raised nearly $685 million for its Series I, and while the valuation climbed to over $43 billion, the Databricks stock price stayed almost the same — $73.50 — due to a fewer number of shares outstanding.26
Lastly, Databricks' most recent round, its Series J, has not officially closed, but the company says it is oversubscribed27 and will raise around $10 billion at a stock price of $92.50, implying approximately a $62 billion valuation.28
How to buy Databricks stock
Since Databricks has decided to remain a private company for now, stock is relatively limited, though accredited investors may be able to access pre-IPO shares through a secondary marketplace such as Forge.
Databricks' most recent funding round is meant in part to provide liquidity to employees, so in some sense that could reduce instances of current or former employees selling shares within a private marketplace. However, if there's enough demand for Databricks pre-IPO stock through private marketplaces, it's possible that Databricks decides to let employees cash out that way, while using more of the Series J funding for internal investment in areas like AI development.
Who can invest in Databricks pre-IPO?
As with any private company, investment in Databricks is generally limited to institutional investors or high-net-worth individuals who are invited to participate in the company's primary funding rounds. Accredited investors might also be able to find Databricks shares for sale on a secondary marketplace such as Forge, but that is contingent on existing shareholders choosing/being able to list their Databricks stock for sale.
That said, Databricks' intention to eventually go public means that more investors, not just accredited ones, will likely be able to invest in Databricks in the future, just not necessarily in the pre-IPO stage.
Where to buy pre-IPO Databricks stock
Accredited investors may be able to buy pre-IPO Databricks stock through a secondary marketplace such as Forge, subject to availability. Existing shareholders would need to decide to list their shares for sale on the marketplace in order for accredited investors to then buy Databricks pre-IPO shares, so availability may be limited or not be available at all.
Those who are interested in investing in Databricks pre-IPO may wish to create an account with Forge and speak with a Private Market Specialist to stay informed about whether Databricks shares become available through Forge.
Alternatives for unaccredited investors who want to buy Databricks stock
While retail investors may not be able to buy Databricks stock directly the way that accredited investors might, it's possible to still get some exposure to Databricks or similar companies through other publicly traded stocks and funds.
For example, the Fidelity Select Technology Portfolio mutual fund holds an allocation to Databricks stock from three different primary funding rounds. However, only about 0.1% of the mutual fund's assets are invested in Databricks, so this exposure is small.29
That said, this fund holds many other AI names, including some other private companies like CoreWeave and Anthropic, so if you have conviction in the broader space, you might invest in this or similar retail funds.
Many tech ETFs or mutual funds, including this Fidelity fund, also hold large allocations of Nvidia, Microsoft, and Amazon stock. Considering that these tech companies are also investors in Databricks, then you might decide to invest in these types of tech funds in order to potentially benefit from the same AI wave. Or, you might invest directly in companies like Nvidia, Microsoft, or Amazon, considering these are all publicly traded companies.
Still, that only provides partial exposure to Databricks. Another option is to invest in Databricks main competitor, Snowflake30, which is publicly traded. In some sense, this provides more comparable exposure to Databricks if you're trying to bet on a sector trend, but at the same time, it's possible that Snowflake's stock performance lags or leads Databricks' performance based on whether one takes market share from the other, or similar business issues develop.
How to analyze Databricks stock
Because private companies do not disclose their financials in the same way that public companies do, stock analysis can be more difficult for the average investor. Still, investors might use the information that is public, such as Databricks' projected $3 billion annual revenue run-rate for 2025, and see how its valuation multiple compares to similar private tech companies using Forge Data.
You can also consider Databricks' past growth and future potential to assess whether it's trading at what you consider to be a fair price compared to other private companies on Forge, though this method of analysis can be highly subjective.
Public company competitors such as Snowflake or Cloudera might also provide somewhat of a benchmark, but again, private company data is much more limited, so it's hard to say for sure how to value Databricks. Plus, investment in any private company typically carries additional risk compared to publicly traded companies, due to limited liquidity, so that risk arguably needs to be accounted for in the valuation.
Get Started Investing in Databricks on Forge
If you want to invest in Databricks pre-IPO if/when shares become available, create an account with Forge Markets to access our deep marketplace of private market securities.
When you create a free account, you'll be connected with a Forge Private Market Specialist to determine your eligibility, and from there you can potentially buy and sell private market shares in Databricks and other startups.
Forge stands out for its transparency into what can otherwise be an opaque private market, and as a publicly traded company itself, Forge provides a regulated, proven way to invest in the private market.
FAQs about investing in Databricks
Where do I buy Databricks stock?
Investing in Databricks pre-IPO is generally limited to those invited to participate in primary funding rounds, such as large asset managers, although accredited investors could potentially find private shares for sale through a secondary marketplace such as Forge.
Who can invest in Databricks?
Because Databricks remains a private company for now, investment is not open to the general public. For the most part, investment is limited to those selected to take part in primary funding rounds, such as large asset managers and some other tech companies. However, if existing investors list shares for sale on a secondary marketplace like Forge, accredited investors may be able to invest in Databricks stock there.
Who are Databricks' competitors?
Databricks' main competitor is often considered to be Snowflake, as both offer similar data management and analytics capabilities. Yet other large tech companies such as Microsoft and Amazon could also be seen as competitors, as they offer some data warehousing and analytics capabilities, for example, yet these companies are much broader than Databricks.
