Poptip Joins Palantir

http://blog.poptip.com/post/93241017288/poptip-joins-palantir

by zachh • 12 years ago

54 50 12 years ago

blog.poptip.com

JPKab3• 12 years ago

Yay! Now you can use your expertise to continue to help Palantir undermine the privacy rights of people all over the globe.

meritt• 12 years ago

I've always though it was a bit weird that Palantir is a "Luminary Level ($10k+)" supporter of the EFF.

https://www.eff.org/thanks

tptacek2• 12 years ago

Exactly what is it that you think Palantir's products do?

trhway• 12 years ago

Generate SARs (as result of "fusing" and analysis of the data from license plates readers and the likes) Poptip will expand their ability to "fuse" various unstructured data like social feeds and phone conversation transcripts.

And what exactly is it that you think Palantir's products do? :)

JPKab3• 12 years ago

Palantir is a private company whose product's development was incubated and developed at taxpayer expense following 9/11 (they essentially researched all of their technologies on the taxpayer dime on govt contracts, then took those technologies and created their product). It's an asshole company that doesn't give a shit about the constitution or human rights.

They also use Congressman Hunter as a paid shill to push their product all over the government as if its a panacea to every data integration issue. Its not.

markhall• 12 years ago

Congrats on the acquisition but I'm still a little confused/surprised by this. The two (seemingly)disparate markets that Poptip and Palantir operate in have little cross-over. Is there a longer-term vision that I'm not seeing?

lukasm• 12 years ago

Acquihire

samstave• 12 years ago

The USG will use PopTip technology to parse the online conversations of the billions they are spying on better.

Yet another reason to loathe palantir.

n09n7• 12 years ago

Hardly. Even if you are worried about personal privacy, why on earth would less accurate spying ever be preferable to more accurate spying?

opendais3• 12 years ago

They do NLP analysis of social media feeds [Facebook, Twitter, etc] which is one of the products Palantir sells to Governments already to find "terrorists".

pbreit4• 12 years ago

Actually, analyzing messaging streams has pretty high cross-over. But I suspect it's mainly acqui-hire and the product in its current state goes away.

dmix• 12 years ago

Having worked at a startup that failed to find a customer base in the consumer world for the NLP software that analyzed social media, I'm not surprised the only application turns out to be defense industry.

There doesn't seem to be many uses for that type of NLP other than surveillance and brand monitoring.

misiti3780• 12 years ago

what startup?

bane5• 12 years ago

Let's talk business here, because I find the numbers behind Palantir both astonishing and fascinating.

Their burn rate looks to be around $275m/yr based on employee head count and they've received ~$900m in funding:

   - Seed - In-Q-Tel (~$2m)
   - Debt Financing - $8.3m
   - Series C - $35m
   - Series D - $90m
   - Secondary Market (unk amount, 137 investors)
   - Series E - $50m
   - Series F - $70m
   - Series G - $56m
   - Secondary Market (unk amount, 137 investors)
   - Private Equity - $196.5m (Founders Fund)
   - Private Equity - $390.4m (Feb 2014)

Their last round was almost $400m in Feb of 2014. That's almost as big as all other rounds combined. Their "valuation" (for whatever that's worth) based on the last investment round is ~$9billion.

As of August 2013 they were not yet profitable but estimates for 2013 revenue were around $450m and <$300m in 2012.

Other revenue estimates (they're all over the place honestly it seems like every time they give an interview it's a different number)

   - 2010 - $50m - >$80m
   - 2011 - $250m
   - 2012 - <$300m
   - 2013 - $450m

They've publicly announced several time they have no interest in being acquired or go public. Yet one of their investors claims on Quora that they'll probably go public in 2015 or 2016.

Some questions for people who understand this mess better than I.

- What's their exit strategy honestly look like? At $9b valuation, I can't imagine too many companies who might be interested in buying them.

- All the private equity investment tells me they're burning money faster than they can find investors, keeping it private keeps their financials private, which smells like trouble to me if they were to go public. Am I right in this analysis or wrong?

- Does dilution basically make everybody who has shares or options through 11 (eleven!) rounds of investment basically holding onto worthless paper? Even if they go public? A review of glassdoor on the company says that people are underpaid and salary capped, they must be holding on for a big payday somewhere. Are they going to end up disappointed?

Anything else that might be interesting to discuss? Their fundraising seems really crazy and unusual from anything I've seen before.

Here's a longform history [1] of the company which shows they spend over $1m/yr on lobbying (IBM spent $6m, Raytheon $7.5m, Lockheed Martin, $14.5m, Boeing, $15m). To put that in percentage terms, if Palantir is worth $9b

   Palantir spends .012% of their value on lobbying
   IBM spends .003%
   Raytheon .026%
   Lockheed Martin .027%
   Boeing .017%

This article also lists 16 distinct financing events, bringing dilution of early investor shares even more to mind.

1 - http://www.mausstrategicconsulting.com/topical-analysis-blog...

graffitici• 12 years ago

I would imagine they are probably operating like Amazon: spending all their money on growth, mainly on acquiring talent. If they get big enough, they will be able to close huge deals with the government. Maybe the investors see this as a safe bet to hedge their portfolio, kinda like a value investment. My 2 cents..

opendais3• 12 years ago

Raytheon, Lockheed, and Boeing all hire ex-Pentagon/Defense officials as well so the official "lobbying #s" are probably low for all of them. ;)

I think Palantir's goal is to burn as hot as it can for as long as it can, then coast on the residuals of its government contracts. [e.g. Make the kind of "open bid contacts" that require automatically fails anyone not Palantir]

pbreit4• 12 years ago

Plus, it's not that helpful to look at lobbying spend as a percentage of revenue. It takes a certain amount to be in the game. Then you get some decreasing returns.

pbreit4• 12 years ago

If you switched to the bull side, you would basically have the opposite article and it would likely have as much merit or more.

They are obviously going to IPO at some point. With the hassle of IPOing, the nature of their business and the easy access to private capital, they'd be dumb to IPO sooner than later.

The secondary market for shares is extremely active and employees can sell a limited number. So almost anyone has probably cashed out as much as desired at this point.

bane5• 12 years ago

The secondary market for shares is extremely active and employees can sell a limited number. So almost anyone has probably cashed out as much as desired at this point.

That's an interesting point. Can you go into more about how that might work? I had assumed they were just internally selling shares to other employees, but could it be they're selling shares to external buyers? I'm not clear on how that works.

tedunangst2• 12 years ago

Re: dilution. If you started with 0.1% of $2m, that's $2000. If each round diluted by half, your 0.00005% of $9b is $4500.

bane5• 12 years ago

Thanks for the explanation, I hope that's worth it for the folks who've been hanging on there for years and years.

grinich2• 12 years ago

FYI: it would be crazy if each round diluted you by half. I've never heard of that happening.

rdtsc• 12 years ago

Palantir is a govt contractor. They need to be big to be heard and be in charge. They want to be Lockheed, Raytheon and Boeing. They can't be big without hiring tons of employees so they are hiring tons of employees.

atmosx• 12 years ago

I don't think it's exactly that, but vaguely I get the same feeling. It's like if they are in the big league. Not being public IMHO it's a way of keeping a discreet profile more than anything else.

That said, only time will tell.

JPKab3• 12 years ago

Exactly. Government contracts don't require the number of people to get the job done. They require the number of people they SPECIFY are required (whether or not that number is correct) to get the job done. Translation: Government contracts are by their very nature overstaffed as fuck.

Butts in seats baby, butts in seats.

bane5• 12 years ago

One of the things I've been reading is that quite a bit of their business seems to be shifting to their financial product from their government product. So I'm not sure how much their government business is still a major part of the company.

superuser2• 12 years ago

What's their exit strategy honestly look like?

Some people want to build actual sustainable businesses. Why are you assuming they have a secret exit strategy when they've stated they're not interested in exiting?

bane5• 12 years ago

A billion dollars in investment so far.

hadoukenio• 12 years ago

If you take on funding, let along through multiple rounds, your backers are going to want an exit. That's VC-101.

wahsd• 12 years ago

You might find interesting that Palantir is basically an extension of the CIA and NSA.

0xeeeeeeee• 12 years ago

Palantir is pretty mysterious to me. Frankly, I don't see the demand for their software being high enough to warrant their size and number of employees.

I guess I'll just have to wait and see what happens.

rdl• 12 years ago

Congratulations. I wish I'd visited Palantir in NYC; I've spent some time in Palo Alto and know people in DC (and downrange), but never met any of their NYC people. It's pretty amazing how I'd had the company pigeonholed as "government contractor" (which is a huge business in its own right), but the commercial stuff seems to be growing even faster.

Poptip Joins Palantir

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