Posted on Tuesday, Jan 20th 2015
Most data analytic companies access troves of structured and unstructured data to help organizations make decisions on improving their efficiency and market reach. But there is also a Billion Dollar Unicorn Club member Palantir Technologies that is taking data analytics to the next level. Their work is extremely secretive, but it is helping government and financial agencies ensure safety of citizens and their customers.
Palantir Technologies was founded in 2004 when Peter Thiel, Nathan Gettings, and Joe Lonsdale worked on software to help track Russian mafia that was defrauding Paypal. The team realized that the technology and products available then to address the issue were too rigid and systems took too long to deploy and required too many services to maintain and improve. They identified the need for a cutting edge technology that would be able to fill the gaps that automated processes were failing to address while ensuring that organizations were able to better secure sensitive data from misuse.
Thus Palantir was born to create software solutions that integrate, visualize, and analyze data specifically focused on security solutions. Their software can be used by the intelligence, defense, law enforcement, and financial communities for critical tasks such as tracking terrorists, human trafficking, financial crimes, and disease outbreaks. Their software has helped track terror networks and keep people safe by identifying safe driving paths in Baghdad.
Initially, Palantir was supported by the government sector, which utilized the firm’s technology to help make the world more secure. Soon though, Palantir graduated to other organizations and offered their services for commercial purposes. Today, nearly 70% of their customers are commercial organizations. Using their technology, banks and financial organizations can identify network connections such as those between IP addresses and proxy servers and also track fund movement to help manage instances of frauds.
Palantir’s products have seen rapid adoption. They do not disclose detailed financials, but analysts estimate that they were on track to earn $1 billion in revenues in 2014. Their customers include names like Morgan Stanley, JP Morgan Chase, the Pentagon, the Justice Department, the NYPD, and the LAPD. But higher revenues have not transformed to profits as they are still in the red.
Palantir has received over $950 million in funding from investors including CIA’s In-Q-Tel venture fund, Founders Fund, Glynn Capital Management, Ulu Ventures, Jeremy Stoppelman, Keith Rabois, Ben Ling, Peter Thiel, and Stanley Druckenmiller. According to Crunchbase, their latest round of funding was held in September 2014 when they raised $444.2 million in a private equity round funded by unidentified investors. Earlier last year, Palantir was valued at $9 billion compared with a September 2013 valuation of $6 billion. For now, they have no intention of going public. If their revenue number is accurately estimated, then the sky high valuation doesn’t seem entirely unrealistic
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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