Palantir considers IPO and predicts profit in 2017
Data analytics start-up’s possible flotation would provide liquidity to employees
Palantir, the data analytics start-up last valued at $20bn, is heading for profitability next year and considering an initial public offering, despite being previously reluctant to brave the public markets.
Palo Alto-based Palantir, which counts the CIA’s venture capital arm In-Q-Tel among its investors, is already profitable in its government businesses, where it provides services and software, including that used to track terrorists.
Alex Karp, Palantir chief executive, said the start-up will become profitable overall, including its commercial business, in 2017 “unless we do something rapidly to prevent it”. Speaking at the WSJD conference in Laguna Beach, he said he would now have to consider an IPO to provide liquidity to employees.
“The public option unfortunately gets foisted upon you when you’re profitable,” he said. “We tried to defer profitability for as long as possible.”
Mr Karp said he had previously resisted the idea of going public because he believes large public companies struggle to recruit the most talented engineers. However, he said Palantir was now considering an IPO, working with private equity firms and other possible ways for employees to know the true value of their stock.
“The primary people I care about are the wide-eyed people working at Palantir every day and night,” he said.
Mr Karp also responded to an investigation by BuzzFeed, which claimed that the company had lost large corporate customers such as Coca-Cola. He said Palantir cannot work with every company and by focusing only on clients that can deliver $100m or more in sales, it had achieved tenfold growth over an unspecified time period.
“We’re still single, we date heavily before we’re married,” he said. “Just because a company is great, doesn’t mean they are a great fit … We are a unique company filled with odd people like me.”
Palantir has 20 contracts worth more than $100m including one with the US navy seals worth about $400m over its lifetime, up from just two in 2014, he said. Revenue generated outside the US doubled last year and has doubled so far this year, he added.
Mr Karp studied for a philosophy PhD in Frankfurt before moving to Silicon Valley and being asked to run Palantir by Peter Thiel, the PayPal billionaire who co-founded the data analytics start-up. It used technology designed to detect fraud at the online payments service to track terrorists for US intelligence agencies.
“It wasn’t just to stop terrorism but to prevent the rise of far-right policies that eviscerate our civil liberties,” he said.
Palantir also addressed a recent US government lawsuit, in which the Department of Labor accused the company of discriminating against Asians, who made up an overwhelming majority of the applicants for job openings at the company.
Mr Karp said Asians make up a quarter of Palantir’s staff and 37 per cent of its developers. “One thing I’ve never screwed up is discriminating against somebody,” he said.