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Palantir Pitches In

To Our Valued Investors:

In past newsletters, Iron Edge VC has focused numerous times on Palantir Technologies, Inc., and their world-changing technology. We have shined a light on the Silicon Valley big data giant’s ability to customize its core offering to a seemingly limitless array of applications from department store loss prevention to baseball scouting to national security. We have explored their occasional exposure to controversy related to things like immigration policy and privacy issues, and their response that they are an apolitical organization comprised of individuals who represent every viewpoint from one end of the philosophical spectrum to the other, but as a company their sole mission is to protect the fundamental well-being of humanity. From the start of this year, Palantir has quite unexpectedly been handed an exceptional opportunity to demonstrate this stated commitment. To underscore their philanthropic leanings, they are going so far as to giving away the goods for free.

In the last days of 2019, Chinese government officials reported dozens of mysterious cases of pneumonia. They had suspected a viral infection, but at the time would not confirm that the disease could be spread from human to human. Little attention was paid in the Western media. Now it feels difficult to believe that this was barely one hundred days ago. Today, every moderately informed inhabitant of the planet knows about the coronavirus, and most lives have been significantly impacted by its spread. Most Americans have at least one personal acquaintance who has been infected. In the New York metropolitan area, almost everybody knows a handful of people who have tested positive.

Aside from the tragic consequences of severe illness, death, economic devastation and mass unemployment, the pandemic spread has produced some secondary, somewhat less predictable developments. Not all of them have been entirely negative. We have seen a reduction, or at least a more benevolent redirection, of partisan bickering in American politics. Families have been “forced” to spend time together at home. Social media have exploded with a cornucopia of gallows humor-type memes. The global climate has enjoyed relief from much of the air pollution related to factory operation and air travel, and Joe Exotic has skyrocketed to stardom.

For Palo Alto’s Palantir, the swift spread of the coronavirus has become an occasion to clearly and publicly demonstrate the effectiveness of their fundamental operation. Palantir’s function is sometimes difficult to explain in easy-to-understand terms. They collect massive amounts of data points ranging from airline passenger manifests to cell phone usage data to crime statistics and innumerable other sources, and they customize the results into actionable facts. Working with BP Plc, for example, Palantir created a virtual duplicate of the energy behemoth’s entire oil well infrastructure and pipeline grid in order to maximize efficiency. This allows BP to produce an additional 30,000 barrels daily, bringing in an approximate $650 million bonus of annual revenue. In the first quarter of this year, the Centers for Disease Control in the United States and the National Health Service in the United Kingdom found themselves inundated with an overwhelming flood of statistics related to the behavior of COVID-19’s spread and symptoms. The facts piled up so quickly that the health agencies were incapable of interpreting them effectively or using them to determine the most prudent actions to employ. Identifying a challenge that resided squarely in their wheelhouse, Palantir came to the rescue.

“Foundry” is the name given to a Palantir program designed to create useful information from various data sources. As described on Palantir’s website, “With Foundry, anyone can source, connect, and transform data into any shape they desire, then use it to take action”. For the CDC and the NHS, Palantir customized their Foundry software to predict what areas were most likely to become the next “hotspots” of the coronavirus outbreak, thereby informing the agencies how to most effectively dispatch resources like respirators, antibiotics, and medical personnel. To accomplish this, Palantir made use of coronavirus patients’ profiles including age, health status, zip code, travel history, and gender. To protect privacy, less relevant but more personal information like names and social security numbers were not included. To further guard the patients’ identity, all data will be deleted after it is no longer useful.

While it is difficult to definitively pinpoint the efficacy of Foundry’s use in battling the viral spread, an abundance of circumstantial evidence is in plain view. Today, we see widespread reporting of encouraging developments in the effort to “flatten the curve”. Daily deaths, and to a greater extent, daily new cases of the disease have started to wane in the U.S., the U.K., and in several other countries that have contracted with Palantir. The scientific community as a whole understands relatively little about COVID-19, so they are hard-pressed to confidently explain how it can be eradicated. It would be quite a stretch, admittedly, to proclaim that Palantir is singlehandedly slaying this particular dragon, but there is clear evidence that the company’s coding has been of great assistance to doctors and first responders. Noteworthy is that during this whole episode, Palantir is living up to its commitment to safeguard human life ahead of commercial and political considerations. The many government contracts of the Foundry programs designed to confront the coronavirus spread comes with a price tag of $0. Apart from the fifteen-or-so countries that have already taken advantage of this generous offer, dozens of other countries are lining up to climb on board as well. Simply put, if somebody wants to give you something extremely valuable for free and with no strings attached, you might consider taking it.

Separate from the recent pro bono work, Palantir’s less generalized and less automated Gotham platform has inked other outbreak-related contracts with Uncle Sam. Specifically, the pacts are worth $17.3 million of federal COVID Relief Fund resources through the Department of Health and Human Services and another $8 million from the Department of Homeland Security. Neither Palantir nor the United States government has elaborated on details beyond their connection to the pandemic. Compared to the pre-corona government contracts reaching into the billions of dollars in Palantir’s resume, these are not massive deals. That said, Palantir’s activity thus far in 2020 has provided an undeniable demonstration of the company’s astounding versatility and its vast potential for roping in revenue after the dust settles.

Palantir shares are not for sale in the public equities markets. While there is persistent chatter about an IPO on the horizon, you cannot buy this one at the stock exchange today. Your friends at Iron Edge VC have access, though, and we can get you in through the front door at an attractive valuation before the masses have the chance to drive Palantir share prices up. If you would like to learn more, or if you know of anybody else who would, please do not hesitate to contact us by clicking “Get in Touch” below.

As always, shares are available on a first come, first served basis.

All Our Best,

Paul Maguire, Managing Partner and The Iron Edge Team

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Paul Maguire

Founder And Managing Partner