Late Stage Mature Pre IPO Unicorns -

Palantir to File IPO in Weeks For Possible Fall Debut

From Bloomberg:

Palantir Technologies Inc., the secretive big-data firm, plans to file to go public in the coming weeks and could start trading as early as the fall, according to people familiar with the matter.

The Palo Alto, California-based company is preparing to register an S-1 filing confidentially with the U.S. Securities and Exchange Commission, said the people, who asked to not be identified because the matter isn’t public.

Palantir is working with bankers to organize a tender offer for private shareholders to help clean up its capital structure ahead of an initial public offering, the people said. It’s also working with an IPO readiness consultant, they said.

Private investors last valued Palantir at $20 billion in 2015. It isn’t clear what valuation it may seek in an IPO. No final decision has been made and the company’s plans could still change, the people said.

A representative for Palantir declined to comment.

For More: Palantir Tells Investors to Expect $1 Billion in 2020 Revenue

The potential IPO comes as Palantir expects to generate $1 billion in revenue this year and break even for the first time in its 16-year history, according to documents reviewed by Bloomberg.

IPO Rebound

U.S. IPOs have enjoyed a mini boom in the U.S. after coming to a near standstill when the coronavirus pandemic took hold in March. That includes companies such as ZoomInfo Technologies Inc., which last week raised $1.07 billion including the so-called greenshoe shares.

Twenty-one IPOs have raised $6.8 billion in the past month, accounting for 44% of the total on U.S. exchanges this year, according to data compiled by Bloomberg.

Co-founded by billionaire Peter Thiel, Palantir’s software mines troves of personal and commercial data and looks for patterns. The company, founded in 2003, got its start interpreting intelligence for the U.S. Central Intelligence Agency and the Pentagon and then moved on to banks, helping them watch for suspicious behavior. In-Q-Tel, the venture arm of the CIA, is a Palantir investor.

Dozens of law enforcement and government agencies around the world use Palantir to compile and search for data on citizens with the intent of combating crime, hunting terrorists and in recent months, tracking the spread of Covid-19. The pandemic has boosted business, particularly with businesses using the products to help determine how to reopen.

However, Palantir is highly controversial for the way its tools have been used to compromise privacy and enable excessive surveillance. Its use by police and immigration officials, in particular, has sparked numerous protests.

IPO Resisted

The company had long resisted a public offering to avoid getting valued as a consultancy, and to stay out of the public eye as it worked toward profitability, people familiar with the matter have said.

Its dependence on engineers customizing software for each client and bloated cost structure also resulted in consistent annual losses. That heightened the possibility that it wouldn’t be valued as a software company despite its Silicon Valley credentials.

That changed last year, with customers using a new more automated product that has put Palantir on the path toward profitability.

The company could go public within a year, Chief Executive Officer Alex Karp said in an interview with Axios Media on HBO last month.

Palantir’s funders include Founders Fund, the venture capital firm started by Thiel. Other investors include Morgan Stanley, BlackRock Inc. and Tiger Global Management.

PayPal, Facebook

Thiel, a co-founder of Pay PayPal Holdings Inc., has helped launch or advance Silicon Valley firms including Facebook Inc., where he has been a board member since 2004. Through Founders Fund, his influence has been extended to an array of technology companies.

For More: Palantir Wins New Pentagon Deal With $111 Million From Army

The billionaire has also served as an adviser to President Donald Trump, chastising other technology companies, in particular Alphabet Inc.’s Google, for their reluctance to work with the Defense Department.

Palantir is in the process of expanding its board — composed of Thiel and three other men — to improve corporate governance and diversify perspectives. The company is interviewing candidates and intends to elect at least two independent members by the end of the year, people familiar with the matter said in April.

— With assistance by Crystal Tse, Scott Deveau, and Gillian Tan

(Revises description of Palantir’s tools and the controversy surrounding them starting in the 10th paragraph.)