- Palantir, the secretive big-data startup which sells technology to corporations, governments, law enforcement and spy agencies, has now publicly released its paperwork to become a pubic company.
- It will be going public via a direct listing, meaning existing shareholders will sell their stock directly, with no investment bank acting as an underwriter.
- With a valuation that has reached as much as $20 billion in past private funding rounds, Palantir could be one of the biggest direct listings in Silicon Valley history.
- The company's S-1 filing does not name all of the investors who have bought shares in Palantir over the years as it raised more than $3 billion in private funding, but it has revealed who the biggest shareholders are.
- We don't know how much shares will be worth when they become public, but we've calculated their value based on the average price that the stock traded on in the private markets between January and August.
- Visit Business Insider's homepage for more stories.
Palantir publicly released its prospectus for investors Tuesday as it prepares to go public in a direct listing.
Palantir's entrance as a public company is interesting in Silicon Valley for a lot of reasons. The company, founded in 2004, is notoriously secretive. Its claim to fame is big data projects for corporations and governments, including spy agencies. It has long resisted an IPO — and the kind of public scrutiny that comes with it.
The paperwork does not name all of the investors who have bought shares in Palantir over the years as it raised more than $3 billion in private funding, but it has revealed who the company's biggest shareholders are.
And, just for fun we have estimated the total value of each of their stakes by pricing all of their shares, no matter their class, at $5.35. (Private sales of its shares took place, the prices per share ranged from $4.19 and $8.50.) The $5.35 price is the volume weighted-average price per share for the period from January 1, 2020 through August 21, 2020, the company said.
For simplicity's sake, we are also calculating the special Class F stock at the same $5.35 value. Class F will be issued only to the three founders with special voting rights and cannot be transferred to another owner, the company says.
Through this and disclosures on Pitchbook and Crunchbase — databases that track private funding deals — here are the people most likely to win big should the company be a hit with investors.
Peter Thiel, founder and director: $1.76 billion+
In 2003, while running his hedge fund firm, Clarium Capital Management, Peter Thiel had an idea for a company. Two years after 9/11, he wanted governments to have access to the same kind of big data analysis that his former company, PayPal, used to stop fraud, as a way to help them prevent terrorists attacks, he told Forbes' Andy Greenberg back in 2013.
So he gathered a few of the young programmers he had on staff and told them to build him a prototype. Palantir was born and he was its chief cofounder.
Today, he is a founder and director of the company. A number of entities controlled by him own shares in Palantir, including Clarium, and Founder's Fund, his venture company, and others.
According to the company, his stake is:
- 43,296 Class A shares
- 328,986,388 Class B shares
- 335,000 Class F shares
Total shares: 329,364,684
Value of stake at $5.35/share: over $1.76 billion.
Thiel is already a billionaire, in large part thanks to his early investment in Facebook, worth an estimated $2.3 billion, according to Forbes.
Alex Karp, CEO and cofounder: $579 million+
Alex Karp holds a PhD in philosophy and is known for being a deeply intellectual influence at Palantir. He described himself like this: "He doesn't have a technical degree. He doesn't have any cultural affiliation with the government or commercial areas. His parents are hippies," he told Forbes.
Still, he became founding CEO when Thiel, his longtime friend from college, asked him to join the company. And his founder's letter included in the prospectus was arguably more philosophy than business analysis.
His stake is:
- 107,841,865 Class B shares
- 335,000 Class F shares
Total shares: 108,176,865
Value of stake at $5.35/share: over $579 million
Stephen Cohen, cofounder: just under $190 million
The legend goes that cofounders Stephen Cohen and Joe Lonsdale spent 8 weeks working and sleeping at the office to create the first prototype of Palantir's big data software to take to their first investor meeting.
That meeting was with Gilman Louie, a former video game designer and founding CEO of In-Q-Tel, the CIA's investment firm, The Washingtonian's Shane Harris reported back in 2012.
It worked: In-Q-Tel agreed to fund the new company. In-Q-Tel's stake (if it still has one) is not listed in the prospectus but Cohen remains on the senior leadership team and is one of the three co-founders with the special Class F shares.
His stake is:
- 35,178,238 Class B shares
- 335,000 Class F shares
Total shares: 35,513,238
Value of stake at $5.35/share: just under $190 million
Sompo Holdings: $575 million+
Sompo Holdings is one of Japan's largest insurance companies. In November 2019, Palantir launched Palantir Japan, a jointly owned entity with SOMPO Holdings.
But Sompo's big stake came when it bought over 100,000 shares of Palantir during Palantir's last private funding raise in July, 2020.
Because Palantir is going public in a direct listing, where investors sell the shares they own to the public, the company itself won't be raising any capital in this transaction.
Palantir, which is still operating at a loss, raised an estimated $537.8 million in private funding in June of which Sompo was one of several investors. Sompo paid 4.65/share, the company says.
Sompo's stake is 107,526,881 Class A shares
Value of stake at $5.35/share: more than $575 million.
Disruptive Technology Solutions: nearly $295 million
Disruptive Technology Solutions is the secretive Los Angeles investment bank that brokers shares of private companies. Its website is famously tight-lipped.
It was founded by Alexander Davis, a grandson of the oil billionaire Marvin Davis.
Palantir is one of DTS's few well-known customers, the NYTimes reported in 2016, and the prospectus confirms. The prospectus also mentions that Palantir founder Joe Lonsdale is involved in one of the several DTS funds that invested in Palantir.
All told, between the stock DTS owns and the stock held by the "entities advised by DTS", the stake under its command is:
- 50,290,069 Class A shares
- 4,737,594 Class B shares
Total shares: 55,027,663
Value of stake at $5.35/share: nearly $295 million.
UBS AG: $160 million+
UBS Group AG is a Swiss multinational investment bank and financial services company.
Palantir has said nothing more about UBS other than listing its stake as a 5% stockholder. However, in 2017, Buzzfeed's William Alden reported that UBS was mentioned in the text of a lawsuit filed by a Palantir investor, indicating that UBS had been involved with the company since at least 2016.
UBS's stake is 29,956,276 Class A shares.
Value of stake at $5.35/share: over $160 million
Joe Lonsdale, cofounder, consultant and investor: $194 million+
Joe Lonsdale was an intern at PayPal and then later an intern/early employee for Thiel's first investment company after PayPal sold, Lonsdale told Business Insider in 2017.
When Thiel had the idea for Palantir, he tasked Lonsdale to help build the initial product alongside Stephen Cohen, another new Stanford computer science grad and PayPal engineer Nathan Gettings.
Lonsdale has long since moved on to other things like his own VC firm 8VC. But he remains a visible face and defender of Palantir, so much so that the company has paid him consulting fees of $144,000 in 2018, $240,000 in 2019, and $120,000 through June, 2020, respectively.
His full stake is difficult to calculate because it is not broken out and is mentioned in relation to two entities, the VC firm he founded, 8VC, and Disruptive Securities, the secretive investment bank that Palantir reportedly has used to broker sales of its shares to private buyers.
Several investment funds managed by Disruptive Securities own Palantir stock, of which Lonsdale is affiliated with one of those funds. He also directly owns 8,091,139 shares of Class B common stock, the company says.
But for simplicity's sake, here is 8VC's stake including the 8 million personal shares for Lonsdale:
- 28,233,725 Class A shares
- 8,097,255 Class B shares
Total shares: 36,330,980
Value of stake at $5.35/share: over $194 million
Shyam Sankar, COO: nearly $45 million
Shyam Sankar joined Palantir in 2006, as employee No. 13, when it was still small and stealthy, he wrote on Quora back in 2012.
As the company grew to thousands of employees he retained his senior leadership position and is today Chief Operating Officer and Executive Vice President.
His stake is:
- 1,335,605 Class A shares
- 7,051,850 Class B shares
Total shares: 8,387,455
Value of stake at $5.35/share: nearly $45 million
Alex Moore, board member: $14 million+
Alex Moore was Palantir's first employee. He left the company after five years to found a couple of other startups, one of which did well enough to be acquired by Ericsson for an undisclosed sum. He then joined his old Palantir buddy Londsdale at Londsdale's venture firm 8VC.
But in 2020, Moore came back to Palantir as a board member when Palantir beefed up its board on its path to going public by adding four people, reported the Silicon Valley Business Journal.
As a partner at 8VC, he may also one-day be entitled to a share of 8VC's windfall. But as a director, his personal stake is 2,665,944 Class A shares
Value of stake at $5.35/share: over $14 million.
Spencer Rascoff, board member: $1.15 million+
Spencer Rascoff is another new member of the Palantir board added in June, 2020. Rascoff is best known for his former role as cofounder and CEO of Zillow, and as one of the cofounders of Hotwire before that.
Today he's an active angel investor and partner at A-list Silicon Valley VC firm Andreessen Horowitz. He is Thiel's neighbor of sorts. Both of them reside in Los Angeles.
His stake is: 215,053 Class A shares
Value of stake at $5.35/share: over $1.15 million.
Adam Ross, former board member: $772,760+
Adam Ross joined the board of directors at Palantir in 2015, according to the Wall Street Journal, the first non-founder and, for a long time, the only independent director, but he left the board in August, 2020.
He's the founder of Texas-based venture firm Goldcrest Capital and a longtime friend of Thiel's from their Stanford college days. In fact, he was editor-in-chief of the "Stanford Review," the conservative/libertarian Stanford publication founded by Thiel and Norman Book just a few years earlier.
The company didn't disclose how many shares he already owns from his five years of service, although it did say that he still had fully vested options to buy 1 million shares at $6.03/share and that the company has calculated this stock would gain him $772,760.
Alexandra Wolfe Schiff, board member: $53,500
Alexandra Wolfe Schiff made headlines in June when Palantir announced that she, too, had become a new board member as of June 2020, making her the company's only female director.
California law requires all public companies headquartered there to have at least one female board member.
Wolfe Schiff was a journalist who wrote a column for the Wall Street Journal but resigned her role to take the post. The daughter of journalist and novelist Tom Wolfe ("Bonfire of the Vanities"), she is reportedly a friend of Thiel's. She wrote a book published in 2017 about Thiel's first batch of college dropout tech fellows and Silicon Valley called "Valley of the Gods."
His stake is: 10,000 Class B shares
Value of stake at $5.35/share: $53,500
Dozens of other investors
Palantir raised $3.35 billion from investors in many fundraising rounds and all of those investors hope their stock will rise once the company goes public.
We don't know which of these other investors still own shares of the company, or if they have sold them in the many private stock sales that have occurred over the years.
But other investors that could have shares include original backer In-Q-Tel, the CIA's venture investment firm, Fidelity, Fujitsu, SoftBank, Tiger Global Management and dozens of other funds.
And Palantir's angel investors, if they still own the stock, should also do well. According to Pitchbook, they include tech billionaire Michael Dell, Adroll founder Jared Kopf, Theil's long-time friend and super angel investor David Sacks, VC Meyer Malka, VC Stuart Peterson and wealth manager Michael Cheung.