Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Palantir’s $2.5 Billion Mystery, Solved

A month ago we reported that Palantir Technologies, the secretive data analytics company, had raised a $68 million round of funding from some unknown investors.

Yesterday, Techcrunch reported that the company has closed the round, and that it was in fact $70 million at an impressive $2.5 billion valuation. Yet the mystery remained: Who are Palantir’s new investors? Two unnamed New York hedge funds.

Today there are new details from Dan Primack at CNN/Money’s Term Sheet that at least one of the two investors is SAC Capital and that the other is speculated to be Tiger Global Management.

I’ve been speaking to my own sources familiar with this funding deal and can confirm that Tiger Global Management is indeed the second hedge fund involved in the round. Multiple earlier investors and university endowments also participated in the round.

And while the company is known mainly for its work with government customers — intelligence agencies have been known to put Palantir’s powerful database technology to use in the hunt for terrorists — it has been boosting its customer base in the private sector as well. Palantir was recently inducted into the J.P. Morgan Chase & Co. Hall of Innovation, an indication of that shift. Its customer base is now 60 percent private.

Named for the mystical seeing stones in the “Lord of the Rings” novels, the company handles massive amounts of data — up to a petabyte — at massive scales for the purpose of analysis. Its government clients have been known to use it to track suicide bombers and to root out abuse of government stimulus money.

The first whiffs of this funding round came in a filing last month with the U.S. Securities and Exchange Commission. This, of course, would come on top of $50 million that TechCrunch reported it had raised in May, and another $90 million it raised in June, which would bring its total funding to $210 million.

And yes, it’s still all very secretive, but that’s not to say that there haven’t been times when the company’s executives came out and talked about what they do. Founder and CEO Alex Karp appeared on the Charlie Rose show in 2009 to talk about cyberterrorism. Key quote: “Software and technology has democratized espionage.” Hear him explain it below:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work