Meta Platforms (META) is investing in Databricks ahead of the startup company’s expected initial public offering (IPO).
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Databricks, which specializes in data analytics software, announced that Meta Platforms has signed on as an investor. The amount of the investment was not disclosed, but the money follows an already established relationship between the two technology companies.
Meta trains the Llama open-source large language models, or LLMs, that Databricks builds on. Staff at Databricks work closely with Meta’s Llama team, and Databricks CEO Ali Ghodsi and Meta CEO Mark Zuckerberg are reportedly friends.
A Rare Investment
Still Meta Platforms’ pre-IPO investment in Databricks is rare. The social media giant doesn’t invest in many startup companies, and is far more risk averse when it comes to early stage investments than other technology giants such as Alphabet (GOOGL) and Microsoft (MSFT).
Databricks is a fast-growing company and on track for an IPO that is widely expected this year, though an exact date hasn’t been set. Meta participated in a previous $10 billion funding round for Databricks, one of the largest venture capital investments in the history of Silicon Valley.
To date, Databricks has secured a total $14 billion in venture capital funding.
Is META Stock a Buy?
The stock of Meta Platforms has a consensus Strong Buy rating among 44 Wall Street analysts. That rating is based on 40 Buy, three Hold, and one Sell recommendations issued in the past three months. The average META price target of $689.12 implies 11.79% upside from current levels.
