Go ahead and take a seat for this one.
Palantir Technologies, the software start-up with deep ties to three-letter law enforcement agencies and Wall Street, has just embarked on one of the most audacious funding rounds seen in Silicon Valley since, well, a couple of weeks ago. A source close to the company says it has already raised $58 million during a funding round that’s expected to top $100 million. The Palo Alto, Calif.-based company is seeking at least a $9 billion valuation.
Keep in mind that Palantir just closed a previous funding round a few weeks ago. During that round, Palantir raised $196 million at a $6 billion valuation. My, what a difference a month makes. At the end of its latest funding extravaganza, Palantir will have raised more than $700 million.
Peter Thiel, the venture capitalist and Facebook board member, co-founded Palantir, which counts the Founders Fund and In-Q-Tel, the venture arm of the Central Intelligence Agency, as investors. Palantir spokeswoman Lisa Gordon declined to comment.
Palantir got its start building software that helps tie disparate databases together to make it easier to search and analyze information. The technology proved to be a big hit among police agencies and intelligence services that wanted to illuminate patterns of behavior among individuals and to manage large volumes of data more efficiently. Wall Street firms have since emerged as Palantir’s biggest customers, using the company’s software to detect fraud and evaluate loans, among other things.
Silicon Valley’s top venture capitalists such as Kleiner Perkins Caufield & Byers, Sequoia Capital, and Greylock Partners all initially passed on investing in Palantir, in part, because the company makes complex, back-end software that had fallen out of favor during the app and mobile boom. The company, founded in 2004, has since turned into one of Silicon Valley’s darlings and something of a mysterious presence. It has bought up a handful of office buildings off University Avenue, the pricey main thoroughfare in Palo Alto and its security staff can often be seen walking around with scowls and communications devices in their ears. The company’s frizzy-haired CEO Alex Karp was a philosopher turned money manager for wealthy individuals before joining Palantir.
The new funding round for Palantir will add to an already frothy investing climate. Dropbox, the file syncing and storage specialist, is in the midst of trying to raise $250 million at a valuation of more than $8 billion. Pinterest, which lets people make scrapbooks online, recently raised $225 million at a value of $3.8 billion and LendingClub, a peer-to-peer lender, did its part with a $57 million round and $2.3 billion valuation. Palantir is expected to make its funding push official with a regulatory filing on Thursday afternoon.
