Exclusive: Databricks is acquiring AI startup Einblick as CEO Ali Ghodsi embraces ‘asymmetric’ strategy
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: alexandra.garfinkle@fortune.com
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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.
This story was originally featured on Fortune.com
