Databricks builds out customer pipeline with new startup-focused venture arm Posted on : Dec 29 - 2021

What better way to ensure you have a growing pipeline of customers than to invest them? Databricks hasn't even gone public yet, but the San Francisco decacorn recently announced a new investment division, Databricks Ventures, to support other startups that are building on its ecosystem.

The eight-year-old San Francisco company hasn’t raised a specific amount for the fund but will draw from its own balance sheet when it decides to invest. It won’t lead any funding rounds, either, but will participate when it makes strategic sense to do so, Andrew Ferguson, who oversees the new venture arm at Databricks, told me.

"It's about finding founding teams and companies that share our vision of an open data AI, machine learning ecosystem. And if that vision is aligned with Databricks and our customer base, that's really where we can partner with them to help accelerate their business, and then it's also good for Databricks as well as being a good financial investment. That's really the win-win," Ferguson said.

The company, last valued at $38 billion, has raised $2.6 billion this year over two rounds through its Series H, and the focus of its investments will be other startups that are building on Databricks' products — specifically, data lakehouses.

Lakehouses are a form of data management technology that cut down on redundant and inefficient storage. Essentially, a data lakehouse takes organized and unorganized information and creates a centralized repository that can be accessed and processed more efficiently across multiple teams within an organization. And a core tenet of the lakehouse is also enabling open-source technology.

This differs from traditional data warehouses that store organized, or structured, information in many different places which can lead to multiple versions and slow down processing speeds. In contrast, large repositories of unstructured data have traditionally been stored in so-called data lakes.

Google's cloud division explains data lakehouses as a new form of data storage "which combines key benefits of data lakes and data warehouses" that "offers low-cost storage in an open format accessible by a variety of processing engines."

The demand for this type of data management has grown with the acceleration of cloud storage and machine learning. View more