In the past, Alexander Karp, the CEO of data analytics firm Palantir, has called wealth “culturally corrosive.” A former money manager for high-net-worth individuals, the cofounder of the CIA-backed data analytics firm has maintained that personal riches were of little importance to him, despite associating with some of the world’s wealthiest to raise funds for his company.
Now, Karp will be one of them.
Palantir is currently raising a round that could total $400 million at a valuation of around $15 billion. At that valuation, which was first reported by Barron’s, Karp, who owns at least 8% of the Palo Alto, Calif.-based company will be worth more than $1.2 billion when the round closes. According to sources close to the company, Palantir began raising money in November and is currently in the fundraising process. One person familiar with the company’s plans said that the company already had plenty of cash, but was raising more to protect itself from any future economic downturn.
Palantir’s activity comes at a time where private technology companies are raising at record valuations and turning their cofounders into billionaires. Chinese smartphone maker Xiaomi, which raised at a $45 billion valuation in December, turned creator Lei Jun, into one of the world’s richest people, while Uber Technologies CEO Travis Kalanick also joined the ten-figure club when his car-hailing service received an $18.2 billion valuation from investors last June. Uber is now worth about $40 billion based on a financing round that was announced in early December.
Now 11 years old, Palantir has gone from a secretive data-mining startup that received early funding from CIA investment arm In-Q-Tel to a Silicon Valley giant that does contract work for the world’s largest government agencies, banks and corporations. As reported in The Wall Street Journal, Palantir has received more than $215 million in U.S. government contract work since 2009, while FORBES estimates that the company took in about $450 million in revenue in 2013.
Much of Palantir’s transformation and business succsess has come down to the work of Karp, a social theory Ph.D. who cofounded the company with Stephen Cohen, Joe Lonsdale, Nathan Gettings and his former Stanford Law School classmate Peter Thiel. Though he lacks a technical background, Karp is known within Palantir as the company’s “conscience” who is responsible for hard decisions like which organizations it should work with.
“The only time I’m not thinking about Palantir,” Karp said for a 2013 FORBES cover story on Palantir, “is when I’m swimming, practicing Qigong or during sexual activity.”
While Karp will likely not be a fan of the new status surrounding his net worth, it’s just the latest indicator of the investor confidence in Palantir. It raised more than $450 million at a $9 billion valuation last year, and total investment in the company has exceeded $1 billion. That money has been raised from a host of well-connected investors including billionaires Kenneth Langone and Stanley Druckenmiller; CIA venture arm In-Q-Tel; Tiger Global Management; and Thiel’s venture firm, Founders Fund. Thiel, Palantir’s chairman, is also its largest shareholder.
Karp is the company’s second largest individual shareholder and will join his former classmate in the 10-figure fortune club when Palantir closes its latest investment. Previously, Karp has said that it would make sense for most businesses of Palantir’s size to go public, though he was not personally fond of the idea.
“[An initial public offering] would make running a company like ours very difficult,” he said in Aug. 2013.
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