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Jury is still out on Palantir's Debut

Jury is still out on Palantir's Debut
October 2 2020

Palantir's direct listing debut was long-awaited. A lot of anticipation on whether Asana or Palantir would be the next IPO star. However, Palantir's debut was mired in controversy and hiccups.

Weeks before the IPO, Palantir has been the target of many criticisms regarding super-voting control and corporate governance. It has caused a lot of distrust and created an image of low transparency. The company then revised its public filing six times; along with early versions submitted privately to the Securities and Exchange Commission, Palantir is now on the 11th version of its offering filing. It even revised its filing twice in one day and reversed changes.

The second piece of contention was the startup's failure to fully disclose information regarding its business practices, omissions that could lead to material risks for future investors and national security issues as it begins trading. One important omission was the funding it received from In-Q-Tel, the CIA's venture-capital arm. A 2009 shareholder report from Palantir revealed that In-Q-Tel held a 10% share in Palantir, but the firm's 2020 S-1 filing did not say whether that investment was still in play or how many Palantir shares In-Q-Tel held. Palantir is listed as one of In-Q-Tel's portfolio companies on the venture group's website.

The third and most shocking controversy is the technology hiccup. Technical issues with Morgan Stanley software prevented some existing investors in the company from unloading shares for much of the afternoon, throwing into question whether there are more sellers waiting in the wings.

Based on these concerns and issues around the company and the process, it is not a complete surprise that the stock has underperformed. By the time markets closed, Palantir’s stock was worth less than it was earlier in the day. The stock closed at $9.50—below its high of $11.42 and its first-trade price.

In the Spotlight - Direct Listed:

Palantir Technologies is a public American software company that specializes in big data analytics. Headquartered in Denver, Colorado, it was founded by Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp. 

Asana is a web and mobile application designed to help teams organize, track, and manage their work. Forrester, Inc. reports that “Asana simplifies team-based work management.” It is produced by the company of the same name.

GitLab is a web-based DevOps lifecycle tool that provides a Git-repository manager providing wiki, issue-tracking, and continuous integration and deployment pipeline features, using an open-source license, developed by GitLab Inc. The software was created by Ukrainian developers Dmitriy Zaporozhets and Valery Sizov. 

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2856 Companies | 264 Funding Activities | 78 M&A Deals

Funding & Deal Highlights:

Cerby, a San Francisco, CA-based stealth cybersecurity company focused on enabling enterprises to harness Shadow IT, raised $3.5 MM in seed funding. The round was led by Bowery Capital with participation from AV8 Ventures, Global Founders Capital, and the Incubate Fund US.

Minnesota-based greenhouse lettuce producer Revol Greens, which just landed $68 MM in new funding, plans to build a facility “somewhere in the Austin-Dallas-Fort Worth megaregion,” according to Twin Cities Business. The investment round, led by Equilibrium Capital, will fund the first 20-acre phase of a Texas high-tech greenhouse project that could span 80 acres at full build-out.

Yummy Corporation, which claims to be the largest cloud kitchen management company in Indonesia, has raised $12 MM in Series B funding, led by SoftBank Ventures Asia. Co-founder and chief executive officer Mario Suntanu told TechCrunch that the capital will be used to expand into more major cities and on developing its tech platform, including data analytics.

Palladio Biosciences, Inc., a privately-held, clinical-stage biopharmaceutical company developing medicines for orphan diseases of the kidney, announced today the completion of a $20 MM Series B investment. The financing was led by a new investor, Samsara BioCapital, with participation from a new investor, the Roche Venture Fund and existing investors, Medicxi and Osage University Partners. Proceeds from the financing will fund Palladio's Phase 3 ALERT Study and advance operations.

Humane Inc., today announced that it has raised a $30 MM Series A round led by Sam Altman and Lachy Groom. This round will enable the company to continue its mission to deliver the next shift between humans and computing.

Fulcrum - the cloud system fueling the future of manufacturing - has raised $3.1 MM in seed round funding to accelerate growth supporting its bold vision for a brighter future through connected production.

Omaha-based Orion Advisor Solutions is acquiring Berwyn, Pa.-based Brinker Capital, a turnkey asset management platform (TAMP), the companies announced today. The deal is being financed with an investment from Genstar Capital, according to the news release, though the financial terms of the deal were not disclosed. Orion is currently majority-owned by TA Associates. According to a company announcement, both TA and Genstar will own equal stakes in the newly combined firm.

Edifecs, Inc., a Bellevue, Washington-based global health information technology solutions company, received a growth investment from TA Associates and Francisco Partners.

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