$6.2 billion AI startup Databricks, which is rolling out a new strategy this week, has a stockpile of more than $500 million to ride through the recession to an IPO thanks to CEO’s ‘sky is falling’ paranoia

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Ali Ghodsi CEO Co-founder of Databricks

Ali Ghodsi, the CEO of artificial intelligence firm Databricks, was so paranoid about an economic downturn that the company raised two rounds of funding in under six months from the likes of Andreessen Horowitz.
Now the company has “well over half a billion dollars on its balance sheet” left to ride out the recession to an IPO, likely next year.
This week the company is unveiling a new concept called “the data lakehouse” that will allow companies to search data more quickly and efficiently than previously possible.
The new approach is a combination of expensive, easy-to-analyze data warehouses and cheap, harder-to-manage data lakes.
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Ali Ghodsi, the CEO of Databricks, a startup that helps companies move massive data sets to the cloud and analyze them, spent the last several years conducting “the sky is falling” exercises where he ran through ways that the company could be “prepared for the worst.”

The coronavirus crisis has justified that paranoia, and this week, in the middle of a downturn in which many companies are just trying to survive, the well-funded company is rolling out a new vision for Databricks’ product that makes it easier for customers to analyze their data.

Because of its doomsday planning, the company raised a war-chest of $650 million in venture capital, most recently at a $6.2 billion valuation, including through two funding rounds led by noted tech investors Andreessen Horowitz less than six months apart. The company still has more than $500 million of that funding left, which it hopes to ride all the way to an initial public offering.

With 2019 annual revenue of $200 million that’s “growing very fast,” Databricks plans to be “IPO-ready next year,” CEO Ghodsi told Business Insider. He says that investors accused him of being like “the boy who cried wolf, asking for money in case of downturn” last fall when he was raising a $400 million F round, but it turned out to be a prudent move. Similarly, Databrick’s decision in mid-2019 to back out on plans to lease a $120 million office space in San Francisco because the team felt like it was “likely that the market’s going to take a downturn,” now seems like incredible foresight, too.

Ghodsi attributes part of his “worst-case-scenario” planning style to the childhood experience of having his family flee their home within 24 hours to escape the Iranian Revolution in the late 1970s.

“You kind of always know things can suddenly take a turn for the worst” after an experience like that, he says.

This week the seven-year-old startup, which has 1,300 employees and 6,000 enterprise customers, is riding high as it hosts an online conference where it will officially launch a product strategy around the idea of a “data lakehouse.” Ghodsi describes the concept as “a new paradigm that could bring a seismic shift to the market.”

For decades companies kept data in “warehouses,” often costly on-premise servers, where it was periodically structured and filtered for …read more

Source:: Business Insider

      

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