Databricks said to top up war chest with $1.8B debt financing

Databricks has reportedly raised yet more cash with a $1.8 billion debt financing round, taking its total debt access to more than $7 billion.

The news was reported over the weekend by CNBC and Bloomberg, with the money coming from syndicated loan investors and private credit sources. Databricks didn’t comment on the reports, which say that it is likely to run an IPO this year.

As an alternative to equity/VC funding, a debt raise doesn’t dilute the existing equity held by stockholders. When a company has a high valuation, such as Databricks’ $138 billion in December, every percentage point of ownership could potentially be worth tens to hundreds of millions of dollars. A VC round can mean issuing more shares and dilute the percentage of stock held by existing share owners – potentially costing them a lot of money in an IPO.

Assuming Databricks expects to have a higher than $138 billion valuation at its IPO point, this consideration becomes even stronger.

A VC round could also mean board seats allocated to new VCs, which would weaken the control of existing board members.

Existing funding can be locked up and not available to supply everyday working capital and operational needs for hiring, product expansion, marketing, etc. Interest on debt is tax-deductible whereas issuing new equity could risk future value increase taxation.

Having the debt available means that an IPO’s timing can be more flexible to respond to market conditions that favor a more successful outcome. It can also facilitate acquisitions. For example, Databricks bought Tabular in June 2024 and Neon in May 2025. Neon’s technology was the source of Databricks’ Lakebase offering.