Microsoft joins $250m funding round for AI company Databricks

Investment follows on from companys' Azure partnership

Microsoft has become the latest investor in big data start-up Databricks, which raised $250m (£193m) in Series E funding.

The latest investment - led by VC firm Andreessen Horowitz - brings the artificial intelligence (AI) company's market valuation to $2.75bn.

Databricks was founded in 2013 and it offers corporate clients the ability to process, integrate and analyse huge volumes of data in a short period of time.

Its Unified Analytics platform aims to eliminate the challenges of data silos by building data pipelines across varied siloed data storage systems, as well as providing a collaborative tool for data scientists and engineers.

The company has now raised $498.5m in total since its inception and claims it exceeded $100m in recurring revenue in 2018.

Ali Ghodsi, Databricks co-founder and CEO, attributed the sizeable investment round to the growing demand for its Unified Analytics offering.

"What's driving this incredible growth is the market's massive appetite for Unified Analytics," he said.

"Organisations need to achieve success with their AI initiatives and this requires a Unified Analytics platform that bridges the divide between big data and machine learning.

"Databricks has gone from almost no revenue to over $100m in annual recurring revenue in just three years, putting us among the fastest-growing enterprise software companies."

Microsoft and Databricks teamed up in 2017 to debut Azure Databricks, which is a tool to process and analyse large streams of corporate data, and the Series E funding marks the tech giant's first investment in the company.

The start-up said the collaborative partnership "simplifies the process of big data and AI solutions", and that it helped accelerate the adoption of its Unified Analytics offering last year.

Rohan Kumar, Microsoft's corporate VP of Azure Data, said: "Databricks has shown tremendous leadership in big data and data science and is uniquely positioned with Microsoft to meet the customer needs across big data, data warehousing and machine learning.

"This investment builds on our successful multi-year partnership around Azure Databricks, a first-party Azure service that in conjunction with other Azure Data services like Azure Data Warehouse is greatly simplifying big data analytics and AI solutions for many Microsoft customers."