In December 2020, Databricks started to plan its IPO, in accordance to Bloomberg. Databricks –> startup company backed by such giants as Google, Microsoft, and Amazon, whose software helps companies process large amounts of data in the cloud. In Feb 2021 the company funded $1 billion at a $28 billion valuation.
Databricks CEO Ali Ghodsi told CNBC after the funding announcement that his company is considering a direct listing but hasn’t made a decision.
- Detailed instructions how to participate in Databricks (pre-IPO, offering price) see below👇
What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company with underwriters' help sets an initial price and date for the stock to begin trading on a stock exchange.
Company Profile and Financial Indicators before Databricks IPO
Databricks, a startup company backed by such giants as Google, Microsoft, and Amazon, is worth around $28B, and its IPO is one of the most anticipated in the tech market this year. Founded in 2013 by those who also created Apache Spark analytical framework, Databricks focuses on developing software used to quickly process large amounts of data. Its major competition includes Snowflake, a cloud service that launched an IPO in 2020 and skyrocketed by 171% during its lockup.
The first financing round took place back in 2013, and the company raised $14M.
In 2020, Databricks upgraded its forecast for the annual earnings from $200M to $350M and raised $900M in investments, which made the analysts assume the company was quickly heading to an IPO.
Microsoft, one of Databricks' core partners, is already using Databricks software in Microsoft Azure, a popular cloud platform.
When it comes to financing, round 7 was the most successful, with the company raising as much as $1B thanks to the investments of Amazon Web Services, Salesforce Ventures, and others.
Currently, Databricks, backed by the world's four largest cloud companies, is one of the most valued private companies in the tech segment.
How to Buy Databricks Stocks Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Databricks IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Databricks shares when the company goes public via a commission-free trading app like eToro.
🚨 Detailed Instructions How to Participate in the Databricks IPO before public trading:
Below we share the instruction how to participate in the approaching Databricks IPO using Freedom Finance (Tradernet platform). This marketplace is chosen as an example because Databricks is already listed there.
- Pros: almost all high-profile IPOs are available for participation via Freedom Finance, no eligibility requirements, no number of previous trades needed and low minimum investment amount for participating in an IPO.
- Cons: the user interface of the platform is a bit outdated.
* Freedom Finance services are NOT available to US citizens and residents.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- 💡 Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
- Submit a request to participate in the IPO — when applications are open select Databricks and click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start — a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Is investing in IPOs profitable?
Not always. The average return at the end of the lock-up period is 72%, past IPOs data.
When is the Databricks IPO date?
Databricks's IPO date is not defined yet. We will update when the exact Databricks date IPO is known – if you want to get notified please subscribe for updates here.
What is Databricks IPO price range?
Not defined yet. We will update when the Databricks IPO offering price is known – if you want to get notified please subscribe for updates here.
How to Invest in Databricks after the IPO date (opening price)?
In what currency Databricks IPO and post-IPO shares will be traded?
The Databricks IPO and stock trading currency will be USD.
If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Transferwise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. TransferWise never hides fees in the exchange rate.
What is the Databricks (stock symbol)