Secretive Data Company Palantir Weighs Giant Public Offering
October 18 2018 - 8:29AM
Dow Jones News
By Rob Copeland
Data-mining giant Palantir Technologies Inc., one of Silicon
Valley's most secretive companies, is weighing an initial public
offering likely to be among the largest in recent years, people
familiar with the matter said.
Palantir is discussing with investment banks Credit Suisse and
Morgan Stanley plans to go public as soon as the second half of
2019, the people said. Some bankers have told the firm it could go
public with a valuation of as much as $41 billion--depending in
part on the timing--or twice what it was most recently valued by
private investors, the people said.
People familiar with the plans said they remain in flux, and
that Palantir could ultimately decide to stay private or offer
shares at a lower price to what is being discussed.
The discussions come amid a gusher of technology giants charging
toward newly volatile public markets. The Wall Street Journal
reported earlier this week that ride hailing firms Uber
Technologies Inc. and Lyft Inc. are eyeing public debuts. Uber
received proposals to go public at a staggering $120 billion
valuation, nearly double its value in a private fundraising round
just two months ago.
Other well-known startups considering IPOs in the months to come
include messenger Slack Technologies Inc. and delivery service
Postmates Inc., The Journal has reported.
Anything close to $41 billion would be a lofty valuation for a
company of Palantir's current size. The company has told investors
it expects around $750 million in revenue this year, up from
roughly $600 million a year earlier. That would equate to a value
of 55 times 2018 revenue. Uber's proposed valuation, by comparison,
would be no more than 12 times the $10 billion to $11 billion it
expects to generate in revenue this year.
Co-founded by famed investor Peter Thiel, Palantir made its name
analyzing large volumes of data for intelligence agencies and
governments around the world. Its analytics have been credited by
investors and staff with helping the U.S. government hunt down and
kill Osama bin Laden, as well as disrupt broader terrorist
networks.
Some of its government work has attracted scrutiny. Privacy
advocates have assailed Palantir for its role in helping
law-enforcement agencies solve crimes. Protesters this year
gathered outside its Palo Alto, Calif., headquarters and tracked
down some of the firm's early executives to picket. Palantir says
its systems "facilitate accountability and oversight."
Started in 2004, Palantir counts as an old hand in Silicon
Valley. It has roughly 2,000 employees with an average age of 30
years old. Staffers embed on military bases for its defense work,
and in factories and corporate offices world-wide for its
commercial arm.
Some employees and investors complain that the firm has remained
private for so long. That has made it hard for them to cash out
their private stakes and contributed to some employees' decisions
to leave, people familiar with the matter said.
Palantir has long teased a debut on the public stage. In a 2016
interview with The Journal, Chief Executive Alex Karp said the
company was positioned to go public, which would allow employees to
"have liquidity at a fair price."
Palantir last raised money--several hundred million dollars--at
a $20 billion valuation in a private fundraising round in 2015.
At roughly double that, Palantir would be seeking a valuation
far above its peers. Competitor Tableau Software Inc., which went
public in 2013, has a market value of around $9 billion. Analysts
expect it to post revenue of about $980 million this year.
Investment bankers often provide a rosy outlook for a company's
future finances to earn business in an IPO.
With Palantir, the potentially higher valuation of a public
offering reflects in part the firm's improving business prospects,
people familiar with the matter said.
After Palantir shared some of its internal metrics with Morgan
Stanley bankers, the bank returned with a range of $36 billion to
$41 billion for a 2020 public offering, the people said. That range
would be lower in the event of an earlier IPO, they said.
Such growth would put Palantir in a rare echelon of public
firms, bankers at Credit Suisse separately told the company,
according to documents reviewed by The Journal. The Credit Suisse
materials advised that there are only two comparable public
companies with growth in Palantir's range.
Eliot Brown and Liz Hoffman contributed to this article.
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
October 18, 2018 08:14 ET (12:14 GMT)
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