This data mining firm is said to have already spoken to Morgan Stanley and Credit Suisse on the potential IPO in 2019, while the initial issuance for this company’s public offering is expected to take place in the second half of 2019.
The estimated value of Palantir upcoming IPO is set at tens of billions of dollars, while the IPO is yet to be confirmed officially. Estimates claim that Palantir IPO is valued between 30 and 40 billion dollars.
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Palantir has lowered the price of employee stock options
Palantir slashes employee options price ahead of expected IPO. Palantir Technologies Inc. has reportedly lowered the price of employee stock options and made bonuses more generous in an effort to boost morale at the data-mining unicorn.
Bloomberg cited unnamed sources who said the new price on employee stock options would value the business at about $11 billion. The Palo Alto company was last valued by private investors in 2015 at about $20 billion.
The move highlights the wide disparity between estimates of Palantir’s valuation ahead of its expected IPO this year.
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Going public in 2019, with a valuation as high as $41 billion
Chances are good that you’ve used or at least heard of Uber, Airbnb and Slack. That may not be the case for what is widely expected to be among the most valuable tech IPOs of 2018: Palantir Technologies. The WSJ reported that this data-mining titan, which it dubs “one of Silicon Valley’s most secretive companies,” may go public in 2019, with a valuation as high as $41 billion.
Co-founded in 2004 by PayPal alumnus Peter Thiel and CEO Alex Karp, Palantir “developed a suite of surveillance technologies that have reportedly been used by the military to hunt down Osama bin Laden, to avoid roadside bombs and by police departments to predict crimes before they happen,” Vanity Fair has written.
On the consumer side, Palantir is harnessing the power of big data to “comb through disparate data sources — financial documents, airline reservations, cellphone records, social media postings — and search for connections that human analysts might miss,” Bloomberg reported.
While much of Palantir’s operations remain shrouded in secrecy, in order to go public, Palantir must “issue a prospectus documenting its revenue and other internal metrics for potential shareholders, which could shed some light on that eye-popping valuation,” Vanity Fair noted.
Peter Thiel has priced recent investments at around $20 billion
Co-founder and chairman Peter Thiel has priced recent investments at around $20 billion.
Morgan Stanley, which hopes to be one of the banks involved in the IPO, has said it’s as high as $41 billion. But mutual funds who invested in the company have given estimates that range from as low as $4.4 billion to a high of $14 billion, with Morgan Stanley’s funds at the low end of that spectrum.
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Palantir Stops Mocking Salespeople and Starts Hiring Them
Palantir Technologies Inc. has always been a different sort of company. It didn’t hire salespeople; it seemed largely unconcerned with pedestrian headaches like turning a profit; and it was co-founded and backed by Peter Thiel, tech’s reigning contrarian.
According to Bloomberg, as the data-mining company preps for its long-awaited initial public offering — which is expected as early as this year — the 15-year-old startup has taken a cue from other, more traditional tech companies. It has trimmed runaway expenses, revamped its product aimed at large companies and has even begun building a sales team, a function it has long disdained.
Palantir is shifting its revenue stream from government to business
Palantir has been successfully shifting its revenue stream from government contracts to large business subscriptions. As a result, increased profitability could position Palantir in the next 12 months for one of the largest ever private tech IPOs, according to a new report from SharesPost.
Since 2017, Palantir has added new products and new customers, while expanding its geographic footprint and forming new strategic partnerships. As a result, the company’s enterprise business will likely account for more than 50 percent of overall revenue, a critical threshold as it approaches a public offering.
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Global demand for Business Intelligence (BI) and Data Analytics
“Palantir is benefitting from the strong, global demand for Business Intelligence (BI) and data analytics solutions,” said Managing Director Rohit Kulkarni, Head of Research for SharesPost, Inc. “Data increasingly powers the growth of large, sophisticated organizations, and Palantir stands to gain significantly from its leadership position.”
From a valuation standpoint, recent comparable IPOs of Big Data/Analytics firms have traded in the range of 7.0x to 8.0x of one-year forward revenues. At the same time, the valuation multiples of Big Data pure-play companies such as Tableau and Splunk have also risen over the past 12 months.
For Palantir to maintain or improve its last known valuation of $20 billion as it enters the public markets, the company needs to achieve either/all of these metrics: 1) 2019 net revenue at or above $2 billion; 2) 2019 net revenue growth rate exceeding 25 percent; 3) gross margins approaching 70 percent or higher; and 4) positive free cash flow.
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