Business / Corporate

Peter Thiel's Palantir announces $150 million joint venture with Japan's Sompo Holdings

Bloomberg

In a rare show of public support Peter Thiel, Palantir Technologies Inc.’s co-founder and chairman, pitched the power of the data-mining company during a splashy Tokyo event Monday marking its formal entry into Asia and a deal with Sompo Holdings Inc.

With the $150 million deal, funded 50-50 by Palantir and Sompo, the duo are inaugurating Palantir Technologies Japan Co. The new company will target government and public sector customers, initially emphasizing health and cybersecurity.

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 spiderweb-like graphics that might otherwise get overlooked.

The push into Asia comes at a critical time for the 15-year-old company. Despite having long-term billion dollar contracts with BP, Merck and others in more than a dozen countries worldwide, Palantir has never turned an annual profit. Under the leadership of Thiel and the management of Chief Executive Officer Alex Karp, Palantir has long emphasized engineering over sales and revenue, a focus that has shifted only this year.

The company has not set a date for an initial public offering and continues to explore raising additional funding from private investors. Palantir spokeswoman Lisa Gordon said there are no formal conversations underway and disputed reports that Palantir is considering a deal with SoftBank Group Corp. or that the company is seeking as much as $3 billion in funding at a $30 billion valuation.

Valuation is a touchy subject for the Silicon Valley company.

Although private investors valued Palantir in 2015 at more than $20 billion, aggressive markdowns by mutual funds and an uncertain IPO timeline have taken a toll. Palantir’s valuation has continued to tumble, with shares trading around $5 a share during the past month, according to data from secondary markets.

Palantir’s public image has also taken a beating in recent years. It has attracted scrutiny from privacy advocates and protesters disturbed by the way Palantir’s software has been used by state and local law enforcement in the U.S., as well as by federal agencies like the Department of Homeland Security while implementing the controversial family separation policy at the U.S.-Mexico border.

Thiel himself has become a lightning rod for criticism, having helped the election of U.S. President Donald Trump in 2016, a divisive decision even within Palantir. That critique could intensify given he has pledged to support Trump’s 2020 re-election.