Palantir's valuation jumps from $6 billion to $9 billion in less than three months

By on December 9, 2013, 9:00 AM
paypal, cia, peter thiel, palantir

Palantir Technologies, a CIA-backed data analytics company, is now worth $9 billion. The valuation comes after the company on Thursday disclosed in a securities filing that it has raised around $58 million in the latest funding round. If the company achieves the expected $100 million mark in this round, its total backing and CEO Alex Karp's net worth would hit $800 million and $900 million respectively.

Palantir was founded in 2004 by Stanford computer scientists and PayPal alumni, and is headquartered in Palo Alto, California. It provides data organization and analysis tools to various public and commercial sector clients including CIA, FBI, JPMorgan Chase and more.

The big data powerhouse received initial investment of $2 million from CIA's venture arm In-Q-Tel and $30 million from Founders Fund, PayPal co-founder Peter Thiel's firm. While the list of backers in the latest fund raiser is still unknown, some of the previous backers include hedge fund Tiger Global and billionaires Kenneth Langone and Stanley Druckenmiller.

The company, which hasn't turned a profit yet, was valued at $6 million back in September. This surge in valuation has put Palantir well ahead of some comparatively well known startups like Spotify (worth $4 billion) and Pinterest (worth $3.8 billion). While many companies (like Twitter) went public at this stage, Palantir has no immediate plans for a public offering.

User Comments: 2

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MilwaukeeMike said:

This surge in valuation has put Palantir well ahead of some comparatively well known startups like Spotify and Pinterest.

Yes, but unlike Spotify and Pinterst, a data analysis firm would actually produce something worthwhile that can be sold. You shouldn't compare a social media or music streaming service to something that provides a valuable service, even on the basis that they're both startups. Those social sites basically just sell ads, good data analysis is incredibly valuable.

And why does it make the news that a data analysis company is now worth more than they used to be?

davednh davednh said:

What I meant to say in response to "Milwaukee Mike" is this:

The reason this is newsworthy is twofold:

1) Palantir is extremely overvalued - this is essentially a BI tool (good but not "$9B" good) - take a look at revenue if you get a chance. Doesn't justify the valuation

2) This is a continuation of the Palantir "hype" machine to justify more investment at the every higher valuation. (can you say #pyramidscheme ?)

Does anyone ask why a company like this would need $500M in investment and still not be profitable? It's because of the consultants who "complete" the product in the field (sorry, I mean "forward deployed engineers" - nice name, BTW).

Note: Palantir does have a good product and there is nothing wrong with the fact that Palantir customizes/finishes the software development in the field but given that the company has a very large amount of pro services bodies/revenue and the fact that it is more about BI/visualization than about Big Data Analytics, the valuation just doesn't work. But, maybe they could use some of the money they raised to purchase a company that analyzes unstructured data (which they don't) and then the company would be much more valuable - still not $9B but more valuable than they are now.

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