Palantir Pre-IPO Analysis

Palantir Pre-IPO Analysis

Palantir Pre-IPO Analysis

Listing gains are likely to be capped by reputational concerns around an otherwise enviable product stack

Palantir IPO: Exercise extreme caution, may not be as smooth sailing as other recent tech IPOs

  • We believe that Palantir might continue to make winning bids for government contracts and maintain/increase its revenue share. However, future growth and share price will be driven by Palantir’s ability to acquire and grow large corporate customers, and not govt. contracts.
  • Palantir has not seen a single year of profits since inception 17 years ago. It is not clear to us how this situation will change in the coming year.
  • We firmly believe that their data mining software is industry leading. But we’re not convinced that this alone is enough for widespread corporate consumption.
  • Palantir has the first-mover advantage to offer specialised, customer-specific, use-case data analytics software. It needs to become price competitive to capture market share. 

Given the negative public image and governance concerns, we don’t think Palantir would repeat the success of a Snowflake or Unity. Listing gains maybe limited, long term investors may want to back the company.

The success of Foundry- Palantir’s enterprise SaaS platform will be the primary driver of its growth. However, in the near term, it will be out shadowed by its negative public perception and unethical use of private data. The stock is likely to underperform, atleast compared to more straight forward SaaS companies. Download the report for an in-depth analysis of this tech giant.

 

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Project Management Simplified?

Project Management Simplified?

Project Management Simplified?

Asana IPO listing expected

Imagine we told you that in the coming week you could invest in a company which has carved out a new space in the category of software? Hold on to that thought. Let’s say the company has recurring revenues, experiencing consistent growth in the recent past – capturing clients from government offices to professional cosmetics including a third of the Fortune 500 names. What if we say that the Co-Founders have already had a proven track record working with Facebook and that 98% of its employees would recommend it to a friend as a great place to work? If all of this interests you, read on…

We are talking about Asana – a work management software-as-a-service platform that helps teams orchestrate their work, from daily tasks to cross-functional strategic initiatives. Asana’s distinguishing factor is its integration capabilities including over 100+ popular applications that combine Dropbox, G Suite, Salesforce, Mail Chimp, and Slack. The company will shortly be traded on NYSE under the ticker symbol “ASAN”.

Company Highlights

  • Asana has over 82,000 paying customers as of July 31, 2020 and over 3.2 Million free activated accounts since inception, representing a large opportunity to convert these accounts into paying customers. 
  • The dollar-based net retention rate of Asana was over by 120% as compared to 2019. They don’t have a lot of meaningful product releases to date but the core features are worth the buck, as their biggest customers are spending more than they did a year ago. For customers with an ACV greater than $50,000, Asana’s NRR expands to over 140%, indicating that its biggest customers are spending significantly more than they did a year ago. 
  • The company’s focus on user experience underscored by sleek and intuitive design is not easily imitable. This indicates the extra productivity and admin features, Asana brings to its premium subscribers including advanced admin controls, specialized support and custom branding.
  • With already 41% of its business com­ing from outside North America, there is a huge potential to expand internationally by tapping enterprise-wide deployments with optimized budgets and its workflow-automation capabilities.
  • Asana has experienced a strong business growth in recent years, and trends seem to remain robust, although growth has been slowing modestly. Revenues were up by 86% year-to-year growth at $142.6 Million. In its most recent quarter ending July 2020, Asana recorded 57% year-to-year growth.
  • However, the market for work management solutions is increasingly competitive, fragmented, and subject to rapidly changing technology. The situation would only become more complicated for Asana, given the low barriers to entry in the industry and highly differentiated SaaS products.

With the current hype for anything SaaS, Asana’s IPO could open trading at a minimum of $9 – $10 Billion valuation just double the last reported secondary market valuation of $5 Billion, replicating the reactions in the lines of SaaS companies like Zoom, Tesla, Snowflake and Unity. The stock might be valued at around 45x forward revenue at the mean of this valuation, which would be among the highest multiple for valuations in the entire tech industry. Read the full report to find out how?

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The Pre-IPO Startup Equity Market

The Pre-IPO Startup Equity Market

The Pre-IPO Startup Equity Market

IPO market geared up for the busiest week

In a low-yield world, is Pre-IPO investing the hidden secret to higher yields?

  • Pre-IPO secondary transactions are growing, and over past few years have consistently generated higher returns over other traditional asset classes
  • Startups are remaining private longer. The average age of technology companies going public has gone from 4 years in 1999 to 11+ years now. As a result, several broker networks and pre-IPO marketplaces have emerged to provide liquidity to early stage investors and employees
  • Our analysis shows that secondary investments in mature startups 2-3 years prior to a liquidation event have yielded between 40%-70% annualized returns with fairly high success rates. That’s not a typo!
  • Case in point – Slack went public with IPO priced at $38.5 per share, earning around 200% above the last private funding round 10 months prior to the IPO.

However, investing in Pre-IPO is no silver bullet. Just like all other forms of investing, you can go wrong and will go wrong. Imagine investing in AirBnB in 2017, or in Bytedance in Dec 2019. AirBnB’s valuation has halved since, while Bytedance has taken a nosedive.

Is Pre-IPO investing the hidden secret to higher yields? Is it a promising asset class that can consistently deliver returns for private investors looking to invest in high quality high growth unicorns headed for a liquidity event in 12-24 months? What are the key risks investors should be aware of?
We did an in-depth analysis of the past performance of this market in order to quantify potential returns, as well as look for potential pitfalls. This report provides a complete analysis and our point of view of the Pre-IPO secondary market, its intricacies and future prospects.

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    3D gaming comes of age

    3D gaming comes of age

    3D gaming comes of age

    Unity IPO blockbuster listing expected

    Unity IPO lists on 17th Sep 2020, one of the many in an avalanche of US tech IPOs to hit the market in the next 6 months.

    Unity Technologies is the creator of an end-to-end development platform that is used to build immersive and multi-platform applications such as mobile devices, home entertainment systems, laptops and computers, and augmented and virtual reality devices. In 2004, Unity was founded by Nicholas Francis, Joachim Ante and David Helgason. The company will shortly be traded on NYSE under the single-letter “U”.Digital channels, if used efficiently, could transform the customer experience by offering better products at a much lower price point by eliminating useless intermediaries.

    Company Highlights

    • Growth in Revenues and Expenses: The company has seen increase in sales in the market and innovative solutions divisions. From $380.8 Million in December 2018 to $541.8 Million in December 2019, reflecting an annual rise of 42%. The key costs of Unity are to investments in R&D and recruiting skilled workers to retain the innovative technological niche in the market. The company’s costs rose dramatically by 33.5%, from $429.8 Million in 2018 to $573.9 Million in 2019.

    • No Debt: Unity is a zero-debt company with its valuation soaring from $6.28 Billion since its last round of financing in May 2019 to $10.01 Billion while it filed for an IPO in a short span of 1 year.

    • Acquisitions: Unity’s new acquisitions include Applifier, deltaDNA, Finger Food, Multiplay and Vivox, which have improved the platform ‘s versatility, added the main creative talent to the staff, and further strengthened Unity’s one-stop integrated platform to meet developer demand.

    • Market Share: Since 93 out of the 100 largest gaming studios are Unity’s clients, more than half of all mobile computing, PC and console games on the market are made using Unity’s platform.

    • Business Verticals: Unity’s SaaS operates with a remarkable net expansion rate; and it can also assert exposure to domains such as mobile ads, 3D animation and AR / VR content. It also enabled Unity expand globally by growing the number of customers producing yearly revenue of more than $100,000 by 39% to 716 in the reporting period of June 2020.

    • Key Players: Unity’s strategic partners in the gaming market are Sony Corporation, Microsoft, Nintendo are big tech giants who try to keep innovating and releasing next-generation gaming consoles provide….download the complete report here

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    What is the motivation behind Torre Capital?

    What is the motivation behind Torre Capital?

    What is the motivation behind Torre Capital?

    Here we take a look at why we see a need to start an investment platform and why we are on a path to revolutionize access to alternative investments

    In my erstwhile career as a Digital Consultant with first Accenture Digital and then Mckinsey, I have had the privilege of building Digital Banks and Fintech platforms from scratch. There were two key takeaways I had from all these experiences put together:

    • Digital channels, if used efficiently, could transform the customer experience by offering better products at a much lower price point by eliminating useless intermediaries.
    • By the time any financial instrument reaches retail hands, a large portion of the profit pool has already been siphoned off. It is a rather simplistic but fairly accurate argument that institutions benefit from early access to investments, which at a later stage gets distributed to unsuspecting retail investors.

    I went looking for a white space in the finance industry armed with these two hypotheses, and soon found one.

    Over a period of six months from January 2019 – June 2020, I personally spoke to over 200 High networth investors and about 50 family offices across 5 APAC countries. The entire group had a few complaints and requirements:

    Issues with current wealth managers:

    • If they didn’t offer their entire portfolio to one private bank, they wouldn’t take them seriously. Anything short of double digits, and you won’t get the advisory or access you need
    • Mostly unsure on how much trust to place on their Relationship Managers.
    • High and opaque fee structure which made returns look ordinary.

    What do they really want:

    • Institutional Access to exclusive products that helped enhance portfolio returns but without the potential of steep drawdowns. Not equity baskets or mutual funds that everyone else is offering under the garb of managed AUM or roboadvisory.
    • Clear and unambiguous understanding of products on offer. No opaque language or unnecessary jargon
    • Clear and transparent pricing that doesn’t try to fleece at the cost of returns. No kickbacks to funds or investment managers
    • An easy self-directed process to invest using digital channels rather than being chased by Relationship managers
    • Support who is readily available and knowledgeable to answer queries, handhold during the investment process. But no hard sell or repeated follow-ups

    Ergo! Torre Capital

    We built Torre Capital with the sole intent of providing a platform that looks out for investor interests before anything else.

    We bring our investors access to asset classes at low minimums so that they can invest even with modest portfolios. We do with only the top decile of funds and startups and other assets that have an excellent track record of protecting and growing investing principal. And we do this at AUM fees that are 5x lower than traditional players.

    We currently bring you access high quality Private Equity Funds, Venture Capital Funds, and Pre-IPO startups. Create a login in 2 minutes to check out the available opportunities.

    Why should you care as an investor for private markets?

    Better Returns and lower volatility

    In multiple articles that follow on this blog as well as my LinkedIn profile, I will demonstrate how returns in PE/VC/Pre-IPO opportunities are calculated and why they make sense. For now, I will borrow from Bloomberg and Goldman Sachs to illustrate the point. They looked at overlapping data for hedge funds, private equity and real estate 1990 to September 2017. A traditional 60/40 portfolio of U.S. stocks and bonds — as measured by the S&P 500 Index and the Bloomberg Barclays U.S. Aggregate Bond Index — returned 8.2 percent annually during that period, including dividends.

    Adding a 10 percent allocation to each of the three alternative investments — as represented by the HFRI Fund Weighted Composite Index, the Cambridge Associates US Private Equity Index and NCREIF Fund Index Open-End Diversified Core Equity, respectively — would have added 0.7 percentage points a year. And thanks to hedge funds’ ability to short stocks and the fact that private assets aren’t subject to the whims of public markets, adding alternatives would also have resulted in smaller declines during each of the last two bear markets.

    Check out our upcoming article on Pre-IPO funds and their past returns. Some of the numbers surprised even us.

    Our promise

    We built this platform to create a differentiated experience, and that is what we are going to provide. As investors, you can be assured of:

    • We will never recommend an investment that we would not put our own money in. None of our team members have a revenue or fee income target, the only target they have is to make sure that we protect our investors’ faith at all costs
    • We will not push products, we will put the facts in front of you as transparently possible, and answer your queries as needed. But ultimate investments decision remains with you.
    • Because of point (2) above, unlike every other fund out there we do not charge any fees on committed capital. You pay when you invest and start earning. Or else you pay nothing.
    • We will not build hidden fees in asset prices. All fees are transparent and upfront. We would rather see you walk away than feel cheated at any point of our interaction

    And it begins!

    The word Torre means tower, or watchtower in Spanish. While you progress in your careers, we will make sure your money works as hard as you do, and that is always protected in the best manner possible.

    Reach out to me at [email protected] 24*7 and I guarantee a response within 24 hours (not working hours!). As we work to expand and better our offering for your investing pleasure, please feel free to send across your feedback and comments.

     

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