Stephen E. Arnold: Palantir Funding + PBI Comment – Not Matched by Vision, Engineering, or Utility

Commerce, Ineptitude, IO Impotency
Stephen E. Arnold
Stephen E. Arnold

Palantir and Its Funding

I read “Palantir May Have Raised More Than We Thought, Perhaps $165 million.” The article presented a revisionist view of how much money is in the Palantir piggy bank. Here’s the number I circled: $165 million since February 2014. I also marked this paragraph:

The Palo Alto company led by CEO Alex Karp disclosed in a Securities and Exchange Commission filing on Friday that it had raised more than $440 million in a funding round that began last November.

The numbers add up. The write up asserted:

The company co-founded by Karp, Peter Thiel, Joe Lonsdale and others in 2004 has raised a total of about $1 billion, with some of that funding coming from In-Q-Tel, the venture arm of U.S. intelligence agencies.

This works out to a $9 billion valuation.

The question now becomes, “How long will it take Palantir to generate sufficient revenue to pay back the investors and turn a profit?” The reason I ask is that IBM is chasing this market along with a legion of other firms.

Terrorism, war fighting, and Fancy Dan analytics are growth buttons. Will there be enough customers to feed the appetites of the outfits chasing the available money?

My hunch is that some of the competitors in this segment will come up empty.

Also, the tonnage of money Palantir has had dropped in its bank account makes the separate injections of $30 million funding into three firms— Attivio, BA Insight, and Coveo—look modest indeed. Perhaps there is more to the Big Data pitch than just words?

Stephen E Arnold

Phi Beta Iota: Palantir appears to be gifted at one thing: fund-raising. It is less able at lobbying and remarkably inept at vision, engineering, and delivering value. It is grotesquely over-priced and under-performing in its present state. Having said all that, given a choice between Palantir and all others including i2 as a starting point, Palantir, in its present 20% state, has the most potential.  However, we do not see that happening. That would require a CEO able to think creatively about what ALL potential clients need (not just the captive US IC and DoD audience, neither of which have a clue how to attack the all-source analysis challenge), and a development team able to understand the art and craft of intelligence analysis. Not in our lifetime….

See Especially:

2014 Robert Steele: Appraisal of Analytic Foundations – Email Provided, Feedback Solicited – UPDATED

See Also:

Big Data @ Phi Beta Iota