Palantir and Sompo: Is a $150 Million Deal Big Enough, Too Small, or Just Right

November 19, 2019

Palantir Technologies has ingested about $2 billion in a couple of dozen investment rounds. Now a $150 million deal is very important to a services firm with a few million in sales. To an outfit like Booz, Allen or Deloitte, $150 million means a partner will keep her job and a handful of MBAs will be making regular flights to wonderful Narita.

Thiel Marks Palantir’s Asia Push with $150 Million Japan Venture” reports that Sompo Holdings is now Palantir’s partner, noting that the $150 million may be more of an investment. We noted this passage:

The billionaire entrepreneur [Peter Thiel] was in Japan Monday to unveil a $150 million, 50-50 joint venture with local financial services firm Sompo Holdings Inc., Palantir Technologies Japan Co. The new company will target government and public sector customers, emphasizing health and cybersecurity initially. Like IBM Corp. and other providers, Palantir’s software pulls together a range of data provided by its customers, mining it for patterns and displaying connections in easy-to-read spider web-like graphics that might otherwise get overlooked.

Bloomberg reported:

Palantir is very close to breaking even and will end 2019 either slightly in the black or slightly in the red, Thiel said at the briefing. The company will be “significantly in the black” next year, he added.

A few comments from the DarkCyber team:

  • The money in the headline is not explained in much detail. There is a difference between setting up a new company and landing a cash deal.
  • Bloomberg seems indifferent to the revenue challenge Palantir faces; namely, there are quite a few investors and stakeholders who want their money plus interest. The announcement may not put these individuals’ minds at ease.
  • The news story does not mention that new, more agile companies are introducing solutions which make both IBM Analysts Notebook and Gotham look a bit like Vinnie Testaverde or Bart Starr throwing passes at a barbeque.

Singapore is the location of choice for some of the more agile intelware and policeware vendors. Is Japan is a bit 2003?

To sum up, Palantir is to some a start up. To others Palantir is an example of a company that may lose out to upstarts which offer a more intuitive user interface and slicker data analytics. It is possible that an outfit like Amazon and its whiz bang data market place could deliver a painful blow to a firm which opened for business in 2003. That’s more than 15 years ago. But next year? Palantir will be profitable.

Stephen E Arnold, November 19, 2019

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