Go to your local Starbucks and ask someone to list the most powerful technology firms today – you’ll probably hear Google, Facebook, Apple, or Amazon. Compared to these firms, Palantir has largely gone unnoticed, yet it may have just as much influence in our daily lives as its peers. Valued at $20 billion in 2015, Palantir shares its spot with Airbnb, Xiaomi, and Uber as one of the world’s most valuable tech startups.
The name “Palantir” comes from J.R.R Tolkien’s Lord of the Rings. It is a dark crystal ball that allows its user to see any part of the world. Palantir Technologies Inc. plays a similar role for its clients by funneling data sets through its software interface to create intuitive maps and predict the future. The NSA, FBI, CIA, law enforcement agencies, various military agencies, and even the IRS have used “Palantir Gotham” to make sense of the enormous amounts of data they’ve collected. The Pentagon used Palantir to track patterns in roadside bombs. Infowar Monitor used Palantir to uncover China’s cyber-espionage operations, Ghostnet and Shadow Network. Palantir is even rumored to have helped track down Osama Bin Laden.
Palantir’s sensitive “big brother” clients have kept the company private with minimal publicity, but that may soon change as the company is mulling an IPO in 2019. Over the course of 10 years, Palantir has slowly shifted its business from counterterrorism towards the commercial sector. “Palantir Metropolis” helps hedge funds, banks, and financial services identify trends and anomalies from various data sets. Today, commercial contracts generate approximately half of Palantir’s total revenue.
Not much is known about Palantir’s business model, but the company is expected to turn a profit for the first time this year in its 13-year history. A report by Zion Market Research predicts the global advanced analytics market to reach $60.44 billion by 2021, growing around 33% per year. Palantir seems poised to capture this growing market. Its European operations have tripled revenues since 2013 and cash burn rate has decreased by 60% across the company, according to Alex Karp, the company’s CEO and co-founder. However, it will face intense competition from established players – IBM, Microsoft, and Oracle.
For now, it is uncertain whether Palantir will follow through with its plans to go public in 2019. With a growing commercial demand for big data analytics and trends in global counterterrorism and information warfare, Palantir’s potential for explosive growth should not be overlooked by tech investors.