Peter Thiel's Palantir Files for IPO With Direct Listing

The data mining company is one of the highest valued unicorns in history.

  • Palantir files to go public in direct listing with ticker PLTR
  • Specializes in software analyzing big data for security, surveillance
  • Customers include governments and private sector firms
  • Has never been profitable, revenue was $742 million in 2019
  • Public criticism of actions, negative media coverage listed as risk

Billionaire investor and Facebook board member Peter Thiel's big data and analytics software company Palantir has joined other tech unicorns (Snowflake, JFrog, Unity, Asana) in filing to go public this week. This one has drawn much more attention, however. For one thing, the firm has been notoriously secretive so far. It's also the fifth most valuable startup in the world with a valuation of $20 billion in 2015, and investors have been anticipating its stock market debut for a long time. Since its founding in 2003, it has raised $2.6 billion in funding from 32 investors, according to Crunchbase.

Here are some other financial highlights we've learned:

  • Revenue 2019: $742 million, +25% year over year
  • Net loss 2019: $580 million. It hasn't turned a profit yet.
  • Revenue H1 2020: $481.2 million, +49% year over year
  • Customers in H1 2020: 125 in more than 150 countries
  • Top 3 customers accounted for 28% of revenue in 2019 (listed as risk)
  • Total addressable market estimated at $119 billion
  • Class F shares for 3 founders with just below 50% of the total voting power
  • It has chosen the direct listing route

Fans of The Lord of The Rings may recognize that "palantir" is the name of the seeing stones/orbs in J.R.R. Tolkien's fantasy series. The company pulls and analyzes data, often of the sensitive kind, from a variety of sources and constructs easy to use surveillance platforms for its government and private sector customers. Its elite team of engineers are dispatched to clients to execute these projects. It's had middling success with commercial enterprises, with a notable failure at JPMorgan when the bank's security chief went rogue, but its biggest collaborations have been in helping the U.S. army overseas, and law enforcement agencies within borders, like the U.S. Immigration and Customs Enforcement (ICE) and police departments. In fact, the filing says Palantir is, "working towards becoming the default operating system across the U.S. government."

A lot differentiates Palantir from internet giants. Its leaders, who have vociferously derided the culture in Silicon Valley, take pride in this. The firm recently moved its headquarters from Palo Alto, California to Denver, Colorado in an apparent snub. "The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires," wrote CEO and co-founder Alex Karp in a letter accompanying yesterday's filing. "Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace." 

There is a lot for those interested in ESG investing to consider, according to the Investor Alliance for Human Rights. The non-profit group comprises of over 160 institutional investors from around the world with a total of over $5 trillion in assets under management. It published a detailed briefing on Palantir and human rights risks last year. Palantir has acknowledged "public criticism, including from political and social activists, and unfavorable coverage in the media" as one of the risks in its filing.

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