Palantir Technologies-Tech Industry’s Next Big I.P.O

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Palantir Technologies a private tech company is preparing to go public in what could be the largest stock market listing of a tech start-up since Uber last year. So you all may be wondering: What exactly does this influential but little-known company do?
Palantir Technologies is an American software company specializing in data mining and big data analytics with deep ties to the U.S. intelligence and military agencies has shed some light on its trademark secrecy about its business in filing for a Wall Street IPO offering recently. Like many other tech companies, it will be going public through without ever turning a profit. While filing with the Security and Exchange Commission on Tuesday, Palantir technologies CEO Alexander Karp presented its financials to the public for the first time. The company incurred $580 million in losses last year mainly due to its heavy reliance on influential government contracts.

The company also informed that it is on track to exceed $1 billion in annual revenues. Palantir Technologies cited revenues of $481 million for the first half of 2020, which is 49% up from the year-ago period. Financials showed its 2019 revenues of $746 million were up by 25% from the previous year. A major part of this growth included a big boost from the U.S. Army, from which it has earned $135 million by a favorable deal. In September 2018 court ruling forced the Pentagon to consider commercially available products from Palantir Technologies in building its systems. That decision opened a massive door to Palantir.

Palantir offers software and, crucially, important teams of engineers that customize the software. The tech company helps organizations make sense of vast amounts of data. Palantir helps gather information from various sources like traffic on the internet and cellphone records and analyzes that information appropriately. It puts those scattered pieces together into something meaningful that makes sense to its users, like a visual display. But it can take a lot of time and plenty of engineers to make Palantir’s technology work the way customers need it to be. And that mix of technology and human efforts may lead to some confusion on Wall Street about how to value the company. People might ask is Palantir a software company, which is traditionally a very profitable business, or is it a less-profitable consulting firm? Or is it both?

Palantir Technologies was founded in 2003, has been known for its technology to be ideal for tracking terrorists. Also, there has been a rumor floating that it helped locate Osama bin Laden. The name Palantir comes from a nod to spherical objects used in the book series “Lord of the Rings” to see other parts of fictional Middle-earth. Partially it was funded by In-Q-Tel, the investment arm of the Central Intelligence Agency (CIA). Palantir built its flagship software technology, Gotham, keeping in mind its use inside the C.I.A.

Palantir’s technologies are also capable to help track the spread of the COVID-19 virus, as it is currently doing for the Centers for Disease Control and Prevention. Also, they can help find undocumented immigrants, which is how Immigration and Customs Enforcement, which works under the White House is using these technologies as disclosed recently by the released federal documents. The company is deeply involved in working inside the government. Although some Palantir employees have stood up against its work with the government agencies.

On Tuesday in a letter to potential investors, Mr. Alexander Karp, CEO of Palantir technologies targeted fellow Silicon Valley companies and said he was proud of Palantir’s work with US federal agencies. During the past few years, Palantir has tried to expand its horizon in the private sector. The company has served big companies like Ferrari, JPMorgan Chase, and Airbus by offering them new software tools that businesses can use on their own. Also more than half of Palantir’s revenue comes from commercial ventures according to the IPO filings.

Palantir holds about a 3 percent share of a $25 billion “data analytics” market, according to a market research firm PitchBook, that tracks the performance of private companies. Brendan Burke, a PitchBook analyst said it contributes a small but significant part to the data analytics market.

The company has faced its own share of issues over the years. In 2016, Palantir sued the Army over the procurement process for a new type of an intelligence analysis system, claiming the process was wasteful and unlawful. Resulting to this, Palantir ended up winning the contract, which accounts for nearly $1.7 billion of the entire $2.9 billion amount in potential federal contract money, the only one it has won since the year 2016.

Project Maven
Further in April, an anonymous government official sent a lengthy note to Joseph D. Kernan, the undersecretary of defense for intelligence, discussing the inner operations of a flagship Pentagon operation, Project Maven. This project is a landmark in its efforts to remake American military technology more sophisticated through artificial intelligence.

Project Maven points to how Palantir works with its customers. It has specialists, called “forward-deployed engineers,” who spend many weeks, months, or years customizing and upgrading its software for the task at hand. Similarly, the company builds whatever data software that needs to be built for a particular project. All of Palantir’s projects vary from each other. It usually connects different sources of data and provides a way forward every day for the employees to search through it. But Project Maven is a bit different. It offers tools that help artificial intelligence specialists build complex mathematical systems, referred to deep neural networks, that can fairly recognize objects in images.

Inside Project Maven, Palantir provides customized software that holds enormous amounts of video footage captured by flying drones operated by the US Army and the Air Force. Artificial intelligence specialists then use this software to build expert systems that can automatically identify various objects buildings, people, and vehicles in the footage.
Although Palantir had come late to Maven, the company had grown a lot to touch almost every aspect of the project through contracts worth about $40 million a year.


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