Palantir: the Billion-Dollar Firm You've Never Heard Of

TechCrunch recently interviewed the CEO of Palantir, Alex Karp. Very intriguing stuff.

Palintir, under 5 years old, has a team of 250-plus engineers nestled in downtown Palo Alto and has just raised $90 million in Series D financing at a $735 million valuation. The round was led by co-founder Peter Thiel’s The Founders Fund and included Youniversity Ventures, Glynn Capital, Miriam Rivera’s Ulu Ventures, Jeremy Stoppleman, Ben Ling, and a couple of high-profile NY funds.

In a nutshell, Palantir’s analysis program is becoming a major player in the war against terrorism and cyber espionage, stimulus spending accountability (Palantir is literally powering the administration’s efforts to identify fraud in stimulus projects), health care, and even natural disasters like the recent earthquake in Haiti. 70% of Palantir's revenues are from government spending.

This year, the platform famously helped researchers at the Munk School of Global Affairs at the University of Toronto expose a cyber espionage ring called the Shadow Network, which was stealing classified materials from India’s Defense Ministry.

Firms that make data sets very user-friendly and easy to manipulate are poised for huge market growth, in my opinion.

Palantir's product is a child of PayPal, born from the start up’s methodology for combating fraud:

Karp said: “They (PayPal) had this massive problem of essentially cyber fraud…they tried algorithmatic approaches…one of the things about that is it doesn’t work really well because the opponent is highly adaptive…What you need is a human mind that’s adaptive."

That would form the foundation for the Palantir platform, which merges human-based algorithms and a powerful engine that can scan several databases at once on an incredibly fine, granular level. The basic system accepts huge databases and allows users to slice the information in seemingly innumerable ways.