Investing in Databricks Stock | How to Buy Pre-IPO Shares (2026)

Databricks is an artificial intelligence data management firm that has helped some of the world’s top-performing companies get the most from their business systems. The company provides access to cutting-edge AI tools, analytics, and other developer tools to improve efficiency and enhance offerings. Today, it operates as a core component of many Fortune 500 business models and more.

Demand for Databricks shares has been on the rise, as it is one of the best-known AI systems and data set providers globally. The company’s notoriety and constant innovations have helped drive interest in its operations. If Databricks were to go public, its IPO would have the potential to break many records.

For now, there are no public plans to host an IPO. However, you can still get your hands on some Databricks pre-IPO shares. Here’s what you need to know.

What is Databricks?

Databricks entered the market to enhance the Apache Spark analytics engine. Apache is used by more than 80% of Fortune 500 companies to streamline their data processing and retrieval services. In 2013, Ali Ghodsi, Andy Konwinski, Arsalan Tavakoli-Shiraji, Ion Stoica, Matei Zaharia, Patrick Wendell, and Reynold Xin founded Databricks to improve AI integration and Apache Spark capabilities. Notably, all the founders are alumni of the University of California, Berkeley.

In 2015, Databricks became a standalone protocol with features designed to help enterprise-level clientele build advanced AI systems that can scale to meet their needs. It also integrated advanced community governance options, enabling businesses to tailor their generative AI models based on user input.

Source – Databricks

Today, Databricks operates as an all-in-one AI and data management system. It allows businesses to develop, tune, and deploy generative AI models in a streamlined manner and with minimal coding. Additionally, the systems can integrate real-time data to improve performance.

Databrick Lakehouse Platform

At the core of Databricks offerings is the Lakehouse platform. This open-source protocol empowers businesses to develop, test, and deploy AI options. These protocols can reduce engineering costs, enhance data science access, improve machine learning algorithms, and better organize analytics.

Unity Catalog

The unity catalog is Databricks governance protocol. This system allows businesses to gather valuable information from clients and employees. Additionally, it includes an advanced auditing system that integrates AI to enable quick and easy management of funds. Businesses can utilize chat prompts to keep tabs on their finances.

Databricks SQL

DatabricksSQL is a Serverless datahouse that allows businesses to run SQL queries without bogging down their internal systems. The program simplifies data management so that any business can leverage real-time analytics to make informed decisions.

Data Science

Another unique option that Databricks offers is the Data Science collaboration tool. This system was built to help drive collaboration and innovation in the AI market. It features developer tools that support full scaling and group building.

Databricks Marketplace

The Databricks marketplace is a vital component of the ecosystem. Users can create AI models and datasets and then offer them to the rest of the community to secure rewards. The market is open to the public and features a variety of datasets, machine learning models, and in-depth analytics that can be used to create customized AI systems for your business.

Historical Funding Rounds

Summary of Databricks Funding:

• Total Funding: Databricks secured $9.67B across 13 funding round
• Largest Round: Databricks’s largest funding round secured $131M  on  December 27, 2021.
• Investors: A total of 74 institutional investors and 1 Angle investor back Databricks
• Latest Round: The latest funding round raised  $5B and was a Series J round held on Nov 28, 2024.

Funding Rounds Breakdown:

• 3 Early-Stage
• 10 Late-Stage

Key Investors:

Databricks has strong support from key investors, including NVIDIA, Capital One, a16z, Fidelity Investments, Insight Partners and Tiger Global Management Baillie Gifford T. Rowe Price, Morgan Stanley, Fidelity Investments, Franklin Templeton Investments, Capital One Ventures, Ontario Teachers’ Pension Plan, , Baillie Gifford, ClearBridge, GIC, Octahedron Capital, Tiger Global Management, CapitalG, Amazon Web Services, Microsoft, AT&T, Qatar Investment Authority, Sanabil, Gaingels, Ghisallo Capital Management Morgan Stanley, Baillie Gifford, University of California, ClearBridge, a16z, Coatue, CPP Investments, Alta Park Capital, Discovery Capital, Gaingels, Dragoneer Investment Group, Green Bay Ventures, Flucas Ventures, New Enterprise Associates, Geodesic Capital, Insight Partners, The House Fund, Greenoaks, Fidelity Investments, CapitalG, Microsoft, a16z, Alkeon Capital Management, BlackRock, Coatue, Discovery Capital, Dragoneer Investment Group, Founders Circle Capital, GIC, and more.

Funding Data Sourced from Tracxn

Why Invest in Databricks?

There are lots of reasons why Databricks could be a great addition to your portfolio. For one, the company has shown a commitment to innovation. It continues to introduce new and more effective products to the enterprise AI market. These tools have helped some of the largest companies in the world simplify complex systems and improve efficiency.

Strong Investor Support

Few companies have institutional backing as strong as Databricks. The firm has support from tech and financial leaders across the market. It consistently secures private funding and is among one of the most recognized names in the market. Notably, the company secured $14M during its first round of funding in 2013 and has since locked in billions to expand its operations.

Databricks Partnerships

When you examine the client list that Databricks has amassed over the last decade, you will notice that it currently serves more than 10,000 organizations worldwide. Of these companies, 60% are Fortune 500 enterprises, including Microsoft, Comcast, Condé Nast, Rivian, Shell, and more.

Databricks Smart Acquisitions

Another strong reason to consider investing in Databricks is its continuous acquisitions. The company has made some smart maneuvers in this regard acquiring multiple tech companies which enhanced its capabilities. Specifically, in 2020, Databricks acquired Redash, improving its interactive interface options. From there, the company went on to acquire 8080 labs. In 2021, Datrabricks acquired the security firm Okera, further improving the platform’s capabilities.

How to Buy Databricks Pre-IPO Shares

Databricks remains a privately held company, meaning that you will need to utilize a specialized approach to get access to shares. Here is what you need to consider.

1. Pre-IPO Secondary Marketplace

Investors sometimes gain exposure to private companies through secondary marketplaces, which connect accredited investors with early shareholders—such as employees, venture firms, or insiders—looking to sell shares before a company’s IPO.

Pre-IPO investments offer the chance to invest during a company’s high-growth phase, often at lower valuations than in the public markets. However, these opportunities come with important considerations:

• Eligibility: Secondary markets typically require you to be an accredited investor, meaning you must meet certain income or net worth thresholds.

• Liquidity Risk: Private shares are usually illiquid until the company goes public or is acquired, meaning you may need to hold them for several years—or potentially indefinitely.

If you meet the requirements and are comfortable with the risks, several platforms offer access to pre-IPO opportunities:

• Forge Global: One of the largest private stock marketplaces, offering shares in late-stage startups like SpaceX, Stripe, and Databricks. Minimums typically start around $100,000.

• EquityZen: A popular platform allowing accredited investors to buy into private companies with minimums as low as $5,000. Past offerings include companies like Discord and UiPath.

• Rainmaker Securities: A full-service broker that helps source and negotiate private share sales, including opportunities in companies like OpenAI, Stripe, and Palantir.

• Hiive: A newer platform with live bid/ask pricing for hundreds of private companies. Transparent and low-fee, with minimums starting around $25,000.

• MicroVentures: Offers pooled access to late-stage companies through special purpose vehicles (SPVs), including past investments in SpaceX and Instacart.

• EquityBee: Allows investors to fund employee stock option exercises at startups, often at discounted valuations, with minimums around $10,000.

• Augment: A digital-first marketplace showing real-time pricing for pre-IPO shares, targeting tech-savvy investors and offering lower transaction fees.

• StartEngine Private: Launched in late 2023, this platform offers accredited investors access to Regulation D offerings in later-stage, venture-backed companies. In its first nine months, it generated $16.5 million in revenue, with average investments around $32,000

Important: Always perform thorough due diligence and consult a financial advisor before investing in private company shares.

2. Private Equity Firms

Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.

3. Employee Equity Sales

Many consider employee equity sales as the best way to acquire pre-IPO shares in Databricks. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.

Private Transactions: there are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.

Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.

There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:

Liquidity Risk

If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option. These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria, such as the IPO’s completion. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.

Regulatory Risk

The blockchain market has seen considerable scrutiny from regulators and lawmakers. While the technology is far better understood than in its early days, there are still many lawmakers who see it as a threat to the traditional financial system. As such, you need to consider how new regulations could affect the value of your pre-IPO shares.

Market Risk

Purchasing pre-IPO shares in Databricks means that you stand behind the project and its team.  The company has secured a reputation for excellence and has previously expressed a desire to go public. However, no concrete data has been provided yet. As such, it’s vital to understand that the blockchain market is an active space that experiences strong fluctuations that could result in a different share value between now and any future IPO launch.

Valuation of Databricks and Future IPO

Databricks has a valuation of $55B as of Nov 28, 2024. The company is one of the most successful AI enterprise firms in the market. It continues to see growing success, with reports showing the company reached $2.4B in annualized revenue in Q3 2024. This revenue growth represented a 60% increase over the previous year. Notably, this positive market activity has helped to drive interest in a Databricks IPO.

Databricks is an industry leader in the AI market, a fast-paced industry that already excites investors. As such, any mention of a Databricks IPO could send pre-IPO share values upward. Although no date has been mentioned, many analysts believe the company may go this route as its notoriety increases.

Databricks Pre-IPO Conclusion

Those who can access pre-IPO shares of Databricks could potentially see upside momentum. The company offers customized AI systems that can scale to meet global demand. As such, it’s quickly becoming a go-to option for large-scale businesses that want to utilize AI systems to cut costs.

There are several considerations you should think about before making any pre-IPO investment. Pre-IPO shares don’t have the same liquidity as normal IPO options, and in some instances, they can include no sale or lock-up stipulations. Additionally, there’s no guarantee that the company’s value will remain the same or increase between an IPO announcement and the actual event.

As such, you need to do your research to ensure the option meets your risk appetite. It’s also recommended that you consult a financial professional. Those who complete these tasks and can qualify for Databricks pre-IPO shares may find that the maneuver unlocks future upside potential.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.