Last year at this time, Palantir (NYSE:PLTR) was gearing up for its long-awaited stock market debut. Now, the data analytics software developer has emerged as a major investor in other tech companies that are themselves getting ready for the public markets.
Palantir’s latest investment was announced on Thursday, when Babylon Health said it would be going public through a special purpose acquisition company (SPAC). A group of investors, including Palantir, committed to invest a combined $230 million into the Babylon transaction.
Palantir has now agreed to at least six SPAC deals in less than three months. A SPAC is a blank-check company that raises money to buy a private entity through a reverse merger and take it public with the help of financing from additional investors.
By participating in the PIPE, or private investment in public equity, Palantir is guaranteed ownership of a certain amount of stock once the transaction closes and the shares in the operating company start trading.
While many tech companies like Google (NASDAQ:GOOGL), Salesforce (NYSE:CRM) and Intel (NASDAQ:INTC) have large venture groups that back start-ups at various stages, Palantir’s focus on SPACs is unique among strategic investors. It means Palantir is betting on more mature companies that are often already valued in the billions of dollars.
SPACs have come to market at a breakneck pace over the past year as an alternative to IPOs. However, the market has cooled of late amid regulatory concerns and an overall pullback in tech stocks. The CNBC SPAC 50 index, which tracks the 50 largest U.S.-based pre-merger blank-check deals by market cap, has slumped nearly 4% year to date, while the NASDAQ has gained close to 6%.
PLTR shares started Friday up 29 cents, or 1.2%, to $23.92.
