You may not know much about Databricks, but you’re going to hear about the AI analytics unicorn a whole lot more this year.
The company is being closely watched as one of the year’s top IPO prospects. And, as Fortune can report exclusively, Databricks is acquiring Einblick, an AI-focused data platform. It’s the latest in a growing line of deals, from Databricks’ $1.3 billion acquisition of MosaicML over the summer to the company’s $100 million October buyout of enterprise data startup Arcion.
For Databricks CEO and cofounder Ali Ghodsi, the Einblick deal is part of the company’s “asymmetric” strategy—essentially, to zig, while everyone else zags. The M&A marketplace is stilted and nervous? Pressure to go public? Time to go on the hunt, even with an IPO-sized elephant in the room to contend with.
“The whole idea was that we can stay private because we’re very well-funded,” Ghodsi tells Term Sheet. “We’ve raised $4 billion in capital, and can actually invest heavily in M&A while expanding in other parts of the world—when every other company can’t do that, they’re facing austerity and layoffs.”
He’s hesitant to discuss a possible (and widely rumored) IPO with even a shred of specificity. But he points back to the 2021 IPO boom, a time when Ghodsi says Databricks could have theoretically gone public, but opted instead to focus on on M&A and R&D, implying that that’s perhaps a tack the company could choose this year as well.
Valued at $43 billion after its Series I in September, Databricks is currently trading around $36 billion on the secondary market, per the most recent Caplight data.
The Einblick deal—like the MosaicML deal—has its roots in a personal connection between Ghodsi and Einblick cofounder Tim Kraska. Kraska is now a professor at MIT, but he and Ghodsi met when they both were students at Berkeley. The pair did research together and kept in touch over the years. While Databricks isn’t disclosing the the financial terms of the transaction, it’s safe to assume this is no MosaicML in terms of price: Einblick garnered $6 million in seed funding in 2020, and in 2022 the company was part of Intel Ignite, the chipmaker’s accelerator program.
Fortune has obtained Einblick’s pitch deck–check it out below.
“We’re talking to people all the time,” Ghodsi says when asked if he’s actively scouting deals. “Now that doesn’t necessarily mean we’ll do every deal, because the price has to be right. The team has to be amazing, and there has to be the same vision.”
While many acquisition-happy companies seek shiny new capabilities they don’t have, new talent, or new perspectives, Ghodsi’s strategy seems to be focused on finding alignment—companies that share Databricks’ recently articulated “data intelligence platform” vision (the crux of it is that, if software eats the world, “AI will eat all software”).
There’s certainly no shortage of AI startups out there for Ghodsi to size up and roll up. Wall Street may be praying for a Databricks IPO, but Ghodsi seems determined to make his mark his own way.
Elsewhere…Amazon has ditched its $1.4 billion acquisition of Roomba maker iRobot after regulatory objections. For iRobot, repercussions have been immediate–CEO and cofounder Colin Angle has stepped down while 31% of the staff is being laid off. It’s been a long road to nowhere, as the deal was first announced in August 2022 and the price last year dropped from the initial $1.7 billion. Check back tomorrow morning for more analysis.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: [email protected]
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Update, Jan. 30, 2024: This web version of the Term Sheet newsletter was updated to include an embed of Einblick’s pitch deck after Fortune sent the newsletter to email subscribers.
Joe Abrams curated the deals section of today’s newsletter.
Venture Deals
- Kore.ai, an Orlando, Fla.-based conversational and generative AI platform for businesses, raised $150 million in funding. FTV Capital led the round and was joined by NVIDIA and existing investors Vistara Growth, Sweetwater PE, and others.
- Portal, a San Francisco-based bitcoin and cryptocurrency trading platform, raised $34 million in seed funding from Coinbase Ventures, Arrington Capital, OKX Ventures, and others.
- Proof Technology, a Denver, Colo.-based provider of document delivery services to law firms and government agencies, raised $30.4 million in Series B funding. Long Ridge Equity Partners led the round and was joined by Blue Heron Capital and TheLegalTech Fund.
- Boston Metal, a Woburn, Mass.-based provider of services designed to decarbonize steelmaking, raised $20 million in a Series C extension from Marunouchi Innovation Partners.
- Compa, a Newport Beach, Calif.-based provider of market data to compensation teams, raised $10 million in Series A funding. Storm Ventures led the round and was joined by Penny Jar Capital, Indeed Ventures, NJP Ventures, Base10 Partners, and Acadian Ventures.
- p0, a Wilmington, Del.-based developer of technology designed to locate safety and security issues in software before it runs, raised $6.5 million in funding. Lightspeed Venture Partners led the round and was joined by Alchemy Ventures.
- Akirolabs, a Berlin, Germany-based provider of collaborative software to procurement teams, raised $5 million in seed funding from HTGF, OTB Ventures, D11Z. Ventures, Serpentine Ventures, and angel investors.
- Wondercraft, a London, U.K.-based provider of AI technology designed to turn text into audio productions, raised $3 million in seed funding. Will Ventures led the round and was joined by Y Combinator, ElevenLabs, and angel investors.
Private Equity
- Arsenal Capital Partners acquired a majority stake in Polycorp, an Elora, Ontario-based manufacturer of engineered elastomer solutions for mining, rail, and other applications. Financial terms were not disclosed.
- Clearview Capital recapitalized AdCellerant, a Denver, Colo.-based marketing technology and services company. Financial terms were not disclosed.
- LP First Capital acquired Northpoint Asset Management, a Salt Lake City, Utah.-based rental property management company. Financial terms were not disclosed.
Other
- WillScot Mobile Mini (Nasdaq: WSC) agreed to acquire McGrath RentCorp (Nasdaq: MGRC), a Livermore, Calif.-based rental company that offers modular buildings, storage containers, offices, and more, for $3.8 billion.
IPOS
- The Fortegra Group, a Jacksonville, Fla.-based specialty insurance company, plans to raise up to $324 million in an offering of 18 million shares priced between $15 and $18. Tiptree Holdings and Warburg Pincus back the company.
- Fractyl Health, a Lexington, Mass.-based developer of type 2 diabetes and obesity therapies, plans to raise up to $116.8 million in an offering of 7.3 million shares priced between $14 and $16. Mithril Capital Management, General Catalyst, Bessemer Venture Partners, and One Palmer Square Associates back the company.
- Alto Neuroscience, a Los Altos, Calif.-based biopharmaceutical company developing depression and schizophrenia treatments, plans to raise up to $107.2 million in an offering of 6.7 million shares priced between $14 and $16. Alpha Wave Ventures, Apeiron Investment Group, Amit Etkin, and Dan Segal back the company.
- Holcim, a Zug, Switzerland-based provider of green building solutions, intends to list its North American business in the U.S. in the first half of 2025.
People
- Fairview Capital, a West Hartford, Conn.-based venture capital and private equity investment management firm, promoted Alan Mattamana and Aakar Vachhani to managing partner.
- General Atlantic, a New York City-based growth equity investor, hired Chris Kojima as global head of capital solutions. Formerly, he was with The Goldman Sachs Group.
- Littlejohn & Co., a Greenwich, Conn.-based private equity firm, promoted Aaron Pomeroy to vice president and Kyle Dunn to associate.
