Palantir, Silicon Valley’s most secretive startup, is worth $41B — 55x its revenue

Data-mining company Palantir hit a valuation of 55x its annual revenue thanks to lucrative covert contracts with spy and law enforcement agencies.

October 19, 2018

Peter Thiel’s data mining company Palantir is considering an IPO after bankers gave the business a $41B valuation, more than double its last valuation 3 years ago.

After staying private for years because an IPO would have made “running a company like [Palantir] very difficult” (to use CEO Alex Karp’s words), the surveillance giant is poised to go public now that the price is right.

So, why is Palantir finally coming out of the shadows? 

Essentially, to find new customers. 

Palantir (which was named, let’s not forget, after a magical crystal ball in the Lord of the Rings used to spy on people) started out in 2004 as an intelligence tool for military and spy agencies. 

Initially, Palantir remained private to avoid public scrutiny: but there are only so many big spy budgets. So Palantir began working for corporate clients like JPMorgan, morphing from a government subcontractor into a big startup.

Secrets are valuable

Like many Silicon Valley startup successes, Palantir has never reported a profit, relying instead on fundraising to keep the lights on (in a funding round in 2015, Palantir raised $880m).

Now that IPO funding seems to grow on trees, Palantir is considering going public like all the other mega-startups. 

Last week, Uber made headlines when banks pegged its IPO value at $120B, or 12x the company’s revenue. But, thanks in part to its secretive (and lucrative) spy and law enforcement contracts, Palantir’s IPO was forecast at $41B — or 55x its annual revenue.

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