Video source: HBO, May 25, 2020.
By Anirban Sen and Joshua Franklin
(Reuters) – Palantir Technologies on Tuesday filed a Form S-1 with the SEC to go public through a direct listing, as the data analytics company known for working with the Central Intelligence Agency and other government groups prepares for one of the biggest market debuts of the year.
The company, which was founded in 2003 by a group including Donald Trump backer Peter Thiel, unveiled losses that are set to test the appetite of capital market investors who have in recent years shown an increasing wariness of backing loss-making startups, most notably WeWork, which botched its IPO last year.
The move to lift the lid on its business for the first time marked a major moment for Palantir, which is widely seen as one of the most reclusive companies in Silicon Valley.
The company reported a net loss of about $580 million in 2019, about the same as its loss in 2018. Revenue came in at $742 million last year, compared to $595 million in 2018.
For the first six months of 2020, the company posted revenue of $481 million, up 49% from the year-earlier period. In June, Reuters reported, citing sources, the company expects revenue in 2020 to grow to $1 billion.
“Notwithstanding losses, its business model continues to leverage off existing clients by offering more value through better data on longer duration contracts,” said Matt Novak, managing partner at All Blue Capital, a Palantir investor.
The Thiel-backed firm had confidentially filed to go public in July.
As opposed to a traditional initial public offering, a direct listing does not raise fresh funds. In a direct-listing model, existing investors get to sell their shares.
Palantir, which derives its name from a magical artifact in “The Lord of the Rings”, specializes in analyzing large quantities of data. The company is widely seen as a tech firm with a rebellious streak in Silicon Valley, with its recent decision to move its headquarters to Denver.
“Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments,” Palantir said in its filing.
Thiel, known for his tech investing credentials as a co-founder of PayPal and Facebook Inc’s first major investor, is the chairman of Palantir, with fellow co-founder Alexander Karp the current chief executive officer.
Thiel was also an early investor in LinkedIn and part of the so-called “Paypal Mafia” in Silicon Valley, referring to a group of highly successful entrepreneurs who went on to start and invest in prominent tech startups.
Morgan Stanley, Credit Suisse and Goldman Sachs are among the financial advisers for Palantir’s listing.
Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; additional reporting by Shariq Khan and Niket Nishant; Editing by Shounak Dasgupta.