Palantir's Public Market Debut

Jul 21, 2024

Palantir's Public Market Debut

Company Overview

  • Founded: 2003
  • Co-founder: Peter Thiel
  • Mission: Provide software to integrate data from various sources into a central platform for secure analysis.
  • Headquarters: Moving from Palo Alto to Denver

Government Work

  • Known for work with U.S. government agencies, including the CIA, Department of Defense, and ICE.
  • Early investors included the CIA.
  • Played a role in uncovering Osama bin Laden, Bernie Madoff's Ponzi scheme, and Chinese spyware.

Commercial Work

  • Clients: Airbus, Chrysler, BP
  • Commercial revenue: 50% of total company revenue, increasing trend.
  • Notable partnerships: JPMorgan Chase, Fiat Chrysler, Airbus, BP.

Financials

  • 17 years on the private market
  • Revenue growing; losses narrowing
  • Question remains about long-term profitability

IPO and Valuation

  • Direct listing, not selling new shares
  • Valuation range: less than $10 billion to over $20 billion

Product Offerings

  • Gotham: For government clients
  • Foundry: For private sector
  • Target market: Companies with over $500 million in revenue
  • High average customer spending: Over $5 million per year

Sales and Marketing

  • Historical lack of salespeople; shift towards building a sales team
  • 2019: Spent 61% of revenue on sales and marketing

Controversies and Criticisms

  • Work with ICE and law enforcement controversial, especially in Silicon Valley
  • Protests and internal dissent about ICE contracts
  • Karp's criticism of Silicon Valley values
  • Peter Thiel's political connections and support for President Trump

COVID-19 Partnerships

  • Collaborating with VA, NIH, NHS, CDC
  • Helping to track virus spread and allocate resources

Strategic Intent

  • Emphasis on supporting U.S. national defense
  • Decision to avoid business with China

Future Outlook

  • Importance of AI in determining global rules
  • Karp's belief in the necessity of U.S./Western leadership in AI

Investor Sentiment

  • Contradictions in political neutrality and political influence
  • Potential classification: High-growth tech company vs. lower-margin consulting firm
  • Public market investors' reaction to controversy and business model