Palantir

Palantir is one of the most secretive data-mining companies from Silicon Valley. It develops software for the CIA and other intelligence agencies, has the world's largest companies as customers, and is widely rumored to help track down Osama bin Laden.

Palantir's investment result is +133%.

About

Palantir develops big data analytics software for intelligence agencies, investment banks, and hedge funds. Its products allow an average user to visualize data from several databases. At the same time, technical specialists have all the tools for a deep-dive study of information.

The company was founded by former PayPal employees, led by its founder Peter Thiel in 2003. The name Palantir was borrowed from the Lord of The Rings by J.R.R. Tolkien that mentions the stones which let you see into your enemy’s secret.

In 2005, Palantir received funding from In-Q-Tel, the CIA venture capital fund, which also became its first contract. Palantir assisted in counterterrorism investigations and operations.

Its work is central to defense and intelligence operations in the United States and its allies abroad – Palantir relies on its US government contracts for over half of its revenue. The company plans to expand in the commercial sector. Its data management software is used by giants across industries, including in the energy, transportation, financial services, and healthcare sectors.

The company made two principal platforms addressing different segments. Gotham, its first software platform, was designed for analysts at defense and intelligence agencies and is used in defense operations and mission planning. The U.S. Army uses its software to ensure the readiness of more than one million military personnel and to make decisions across dozens of command structures. Palantir Foundry helps organizations integrate and analyze the data they need in one place.

Palantir generates revenue from the sale of subscriptions to access its software and consulting services. The average check per customer in 2020 is incredibly high, at $7.9M. The top twenty clients in 2020 paid the company an average of $33.2M each.

In 2020, the company generated $1.1B in revenue, a 47% increase over 2019. 56% of the sales came from government contracts, 44% – from commercial enterprises.

Market

Common commercial contracts with Palantir’s customers last from 5 to 10 years. This approach and the number of pre-orders make the company a leader in its industry with huge growth potential. Palantir’s estimated total addressable market is $119B across the commercial and government sectors.

To strengthen its leading position in its niche, Palantir has acquired several companies since 2013:

• Kimono Labs – turns websites into structured APIs from your browser in seconds.

• Propeller – a web platform to quickly create and update apps with an intuitive drag-and-drop interface.

• Poptip – a conversation analysis platform that helps brands and media understand public opinion in real-time and make decisions quickly based on that opinion.

Palantir’s software is used by customers across 36 industries and in more than 150 countries. In the second half of 2020, 149 customers used Palantir products, including some of the world's most important organizations.

Palantir believes that its software tackles the systemic failures of government institutions to provide for the public – erosions of data privacy and loss of legitimacy. Its software is used by assembly workers in France, pharmaceutical researchers in Germany, public health administrators in the United Kingdom, national police in Denmark, and special forces personnel and senior military officials in the United States. Palantir secured more revenue from the U.S. Army in the first half of 2020 than it did in the previous 10 years combined.

Airbus, BP, IBM, Credit Suisse AG, Fiat Chrysler Automobiles, Merck & Co, and others are among the customers of the company.

Details

Palantir was one of our first investments. Back in September 2017, this stock was bought for the first time at $8.35.

In September 2020, the company went public through a direct listing, its shares opened at $10 per share.

Investment in Palantir closed in April 2021 when the stock was $23.13, with +133% result.