Palantir, the mysterious data analytics companies that has become one of the most valuable Silicon Valley unicorns despite being for all intents and purposes, a black box, has just given investors the first look inside the kimono.
Pardon our mixing of metaphors - but it really is difficult to understate how eager some investors have been to see these financials. As it turns out, the company, which is also known for receiving some of its early funding from a CIA-backed VC firm, lost $580 million last year.
Looks like they're going to need to spy on more people.
Palantir was expected to go public this year, one of a handful of Silicon Valley stalwarts, including Airbnb, that missed out on last year's string of hot IPOs (some of which - Zoom, Peloton - have done quite well in recent months).
The financials leaked over the weekend, but this is the first confirmed look from the company to investors.
For those of our readers who aren't irredeemable fantasy nerds, Palantir was named after a magical orb from one of "The Lord of the Rings" books. It was co-founded by Peter Thiel in 2004, after he had already succeeded with PayPal and just after he made his career-cementing investment in Facebook.
Here's what we know so far about the financials so far:
- The company lost $588 million ($580 million on a pro-forma basis) in 2019, according to its S-1 filing. Revenue grew almost 25% from the year earlier while its losses stayed roughly even - no doubt a good sign that the business is "scalable" (however horrifying that might sound to some). In the first half of 2020, Palantir lost $165 million, or $175 million on a pro-forma basis.
- Palantir has two classes of stock, Class A and Class B, and while each share of Class A stock receives the rights to one vote, each Class A share gets 10 votes. In this way, the structure is similar to Facebook's, and is really a classic Silicon Valley strategy for retaining founder control. Palantir says it plans to introduce Class F shares as well, which will carry a variable number of votes.
- Reuters has reported that the company is targeting a valuation of around $26 billion, an ample sum. CNBC reported in April that Palantir hoped to eclipse $1 billion in revenue in 2020.
For those who feared last year's string of flops threatened to dampen investors' appetite for deals, the opposite almost seems to be the case. Palantir follows a flurry of filings for IPOs and direct listings from Amwell, Asana, JFrog, Snowflake, Sumo Logic and Unity Software. The surge in deals at such lofty valuations has given rise to "the SPAC", a sort of backdoor IPO that until very recently was mostly the province of shady middle men. More recently, Bill Ackman, Chamath Palihapitiya and other big name investors have gotten involved. Ahead of the filing, the company announced last week that it would be moving its headquarters to Denver from Palo Alto, according to CNBC.
As for those who are still wondering, 'what, exactly, does Palantir do?', here's how CNBC explains it: "With Palantir’s software, clients can clean up a wide variety of data and then display it in various styles to enable many people to explore and take action on it. Recent enhancements enable users to create text documents, analyze data in spreadsheets and view information on maps."
And here's an example of what these advanced "analytical" tools can help certain people - for example, law enforcement - accomplish.
Read the full S-1 filing here.