After speculations of an Initial Public Offering, the much storied U.S. data analytics startup Palantir is surprisingly raising $500 million from Japan’s Sompo Japan Nipponkoa Holdings Inc. Why surprising you ask? Becauase most were speculating an IPO any time soon. However, an IPO may still be right around the corner, and the fundraise could be an attempt to beef up the asking price in that IPO.
The Silicon valley firm caters to a diverse range of clients, spanning from global banks to the U.S. government and the Central Intelligence Agency. The rise in demand caused by COVID 19, which had made data analysing rather essential, has the company looking for investments. Experts have been suggesting that Palantir might open up an IPO very soon, but so far nothing has been officiated.
The firm does not talk about the valuation at which the capital was raised. Palantir’s last round valued the company at $20 billion. But if media speculations are anything to go by, current valuation in private markets has been fluctuating between $10 billion to $14 billion in the recent weeks.
This investment lessens the need for an immediate Initial Public Offering, which is still on the cards. Bloomberg reports that the company is considering a direct listing of its shares on an exchange as an option, in an attempt to bypass the formalities of an official IPO. The news house also reported last week that the company is preparing to confidentially file paperwork with U.S. regulators for the stock to begin trading in the fall.
The final decision rests on the board of the company, which is led by Peter Thiel, the billionaire who found the company in 2003. The tech mogul has went on to secure deals with various government organisations, including U.S. immigration officials and police agencies, who in turn have been accused of using the tools to discriminate and surveil, causing backlash for the company. However, the firm’s technology has also been used to find terrorists by the U.S. military.
The company has also expanded beyond U.S. agencies, launching a 50-50 joint venture with Sompo called Palantir Technologies Japan K.K. to service the Japanese government as well as commercial clients, last year.
