Few entrepreneurs have become billionaires on the back of their ideas launching on the stock market, and fewer still do it repeatedly. But one man associated with several successful stock market launches (and more on the way), is Peter Thiel. A man who has had countless business successes in his lifetime and this year alone has come to see several of his brainwaves float on the public markets.
Each company launch did so with an explosive reception, further establishing his esteemed status. The valuation of these companies may in turn have been boosted by the credibility of his involvement, but as he appears to have the Midas touch, this seems well deserved.
So, which companies have brought Thiel riches in 2020 so far?
Compass Pathways (Nasdaq:CMPS), Palantir Technologies Inc (NYSE: PLTR), Credit Karma and Postmates.
Compass Pathways and Palantir both floated on the stock market this year, while Credit Karma was bought by Intuit Inc. (NASDAQ: INTU) for $7.1 billion and Postmates was acquired by Uber Technologies Inc (NYSE: UBER) for $2.65 billion.
Each of these events has netted Thiel a pretty penny, and the year is not over yet! There is also the high likelihood Airbnb will IPO in December and he also has a stake in Luminar, which is rumoured to be contemplating a 2020 IPO too.
IPO / Sale Worth
Prior to this year’s series of windfalls, Thiel has been party to several more successes. He was co-founder of PayPal (Nasdaq : PYPL), his venture capitalist group Founders Fund and Silicon Valley data analytics company Palantir Technologies Inc (NYSE : PLTR). He was also the first investor to take a chance on Mark Zuckerberg in Facebook (Nasdaq : FB). Additionally, he has held stakes in Oculus, Spotify Technology SA (NYSE: SPOT), Twilio Inc (NYSE: TWLO) and Zynga Inc (NASDAQ: ZNGA).
From PayPal to Palantir
Cutting edge technologies are his passion, and after discovering some unique benefits to PayPal’s platform, Thiel himself came up with an original idea for fighting terrorism. During his time at PayPal, he discovered they could connect the dots between fraudulent payments that had no apparent connection and use their discoveries to fight Russian cybercriminals. This led to a rapid reduction in PayPal’s losses to fraud, quickly gaining a competitive advantage over its competitors.
Taking this knowledge, he asked his law school friend Alex Karp, if it would be possible to build software to uncover terror networks. The following year, in 2004, Thiel and Karp co-founded Palantir Technologies Inc (NYSE: PLTR) along with three other investors. Thiel provided $30 million in start-up funding, via his own venture-capital fund. In no time the company had been introduced to innovation seekers In-Q-Tel, which subsequently invested $2 million into Palantir and connected the team with the CIA and other spy agencies.
Progress was slow, but over time Palantir strengthened its relationship with these agencies building search tools that allow them to infiltrate criminal gangs and terrorists around the globe. In September, Palantir finally went public in a direct listing.
The success of Peter Thiel’s Founders Fund has led to appearances in several Forbes rich lists over the years. In 2014, it was number four on the Forbes Midas List, with a net worth of $2.2 billion. At the time of writing, Peter Thiel is #391 on the Forbes 400 2020, with a real time net worth of $2.7 billion. He’s also #43 on The Midas List: Top Tech Investors 2020.
Additionally, he is a shareholder in several companies that have yet to come to market but are still a part of our everyday lives. This includes several unicorns that could potentially IPO before the end of the year.
Founders Fund’s portfolio currently includes the following 61 investments:
Emerald Cloud Lab
Facebook, Inc. (NASDAQ: FB)
Palantir Technologies Inc (NYSE: PLTR)
Applied Molecular Transport Inc. (NASDAQ: AMTI)
The Climate Corporation
Asana Inc (NYSE: ASAN)
Twilio Inc (NYSE: TWLO)
Unity Biotechnology Inc (NASDAQ: UBX)
Long Term Stock Exchange
LYFT Inc (NASDAQ: LYFT)
COMPASS Pathways PLC (NASDAQ: CMPS)
Spotify Technology SA (NYSE: SPOT)
London based Compass Pathways launched on the Nasdaq in September 2020. It’s a mental health care company exploring the therapeutic and treatment possibilities of psilosybin based psychedelic therapies. Thiel is a visionary and has successfully foreseen the possibilities new and disruptive innovations can bring to our lives. (Very similar to Cathie Wood’s approach to investing)
In our research, which we give away as a service, we aim to surface and highlight the risks that are increasing in both growth and value benchmarks. If we are correct, exponential growth in the digital world will “Amazon” industries and sectors during the next 10 years. https://t.co/yGIbi6Wce3
— Cathie Wood (@CathieDWood) October 18, 2020
Peter Thiel is also a big believer in biotechnology and the possibilities it brings to enhancing and lengthening life. He has even registered to be cryonically suspended. This means if technology advances to the stage that dead people can be revived, he would have a second chance at life. The process involves the dead body being subjected to low-temperature preservation until such time revival is possible. It’s currently very expensive and highly speculative.
Luminar Technologies, Inc
Luminar Technologies, Inc. is an autonomous vehicle and lidar technology company for consumer cars and trucking. It’s being designed with scalability and flexibility in mind. Peter Thiel was the lead investor in a Luminar funding round in August, during which $170 million was raised. In September special purpose acquisition company (SPAC) Gores Metropolous Inc. filed a registration statement with the SEC that it plans to merge with Luminar. It intends to IPO via this SPAC early next month. Luminar is expected to be valued at around $3.4 billion after the merger.
Luminar and Daimler Trucks have established a partnership with a strategic investment, and along with Torc will pursue a common goal of bringing series-produced L4 trucks to highways globally https://t.co/Ch0RK32sIz pic.twitter.com/EJmWOeDASD
— Luminar (@luminartech) October 30, 2020
A wholesale market for retailers, where they can shop from over 13,000 independent brands, all in one place. Over 100,000 local retailers are signed up, and Faire connects them with both emerging and established brands. It was established in 2017 on the premise that the future of retail is local. It wants to connect the independent entrepreneurs with small but viable retailers creating a win-win scenario for all involved. It is providing a great alternative for small businesses to compete against Amazon.com, Inc. (NASDAQ: AMZN), and it hopes to launch in the UK next year.
At the end of October Faire was valued at $2.5 billion after a Series E fundraising round led by Sequoia Capital. This included participation from existing investors such as Thiel’s Founders Fund and also brought new investors on board. These include DST Global, D1 Capital Partners, Norwest Venture Partners and Dragoneer.
Founded in 2013 and powered by artificial intelligence, Snapdocs is a mortgage loan platform. Last month it raised an additional $60 million, to recruit and further advance its machine-learning systems. Snapdocs has enjoyed record growth this year which its founder says is down to low interest rates and the pandemic induced bull-run on tech. The majority of the $103 million raised so far is still cash-in-the-bank, which proves it is prudently managed.
Snapdocs is a neutral platform that connects everyone involved in the real-estate process. Lenders, settlement agents, title companies, borrowers, notaries and other institutions use this one space to simplify the property closing process and reduce the time taken from days to minutes.
“Our position of being this neutral, Switzerland platform that literally helps everybody in the real estate process all the way down to the consumer work together better, this is the type of company that can keep growing for decades,”
– Snapdocs CEO, Aaron King.
With our Series C funding we will continue to create the best solution for all involved with the closing process by introducing more innovation in our products, increasing our network growth, and going deeper in supporting all stakeholders.https://t.co/yQQHU91Ni7
— Snapdocs (@snapdocs) October 15, 2020
Affirm is a business that offers shoppers an option to pay for goods in instalments, via short-term loans. It was founded back in 2012 and is reportedly looking at an IPO with a valuation of up to $10 billion. This ability to spread payments over a longer period really appeals to shoppers and can increasingly be seen offered at the checkout pages of big brand sites. Affirm is currently accepted by Walmart and Expedia Group and Shopify is expected to be on board soon too.
ZocDoc is a doctor patient telehealth platform that allows patients to search online for doctors and book appointments directly. It was way ahead of its time, being founded back in 2007 and was slowly gaining recognition and popularity. Then as the pandemic rapidly enveloped the globe, ZocDoc found itself perfectly placed to pivot into telemedicine.
A similar thing happened to Phlo Digital in the UK, which we covered last month. It was able to ramp up its online pharmacy delivery service via its Phlo app after the pandemic hit.
According to its last series D funding round, ZocDoc is currently valued around $2 billion. That may now be significantly more given its recent success.
Hubble is a contact lens company shipping high quality, affordable lenses throughout the US and other parts of the world. Founded in 2016, it offers a starter box for $1 and then it costs around $1 a day for ongoing lenses. This works out much cheaper than typical providers and its subscription model makes repeat ordering simple. It also has a sister site called ContactsCart, where consumers can order their favourite branded contact lenses at a discount. Its direct-to-consumer model is gaining traction in recent years, with a significant ramp up in 2020. Hubble Contacts has raised $70 million from various investors and was last valued at around $246 million in late 2019.
Ramp Financial runs a corporate card & expense management platform. Users of the Ramp Financial corporate card can replace expense reports with unlimited virtual and physical cards. It is designed to automate accounting, lower the price of bills, and deliver 1.5% cash back on everything. It’s a hot space in the venture capital world and its peer Brex recently received a $2.6 billion valuation.
Cloud9 is one of the most recognizable Esports organizations in the world. It was launched in 2013 and has gone from strength to strength. It hosts professional multi-game Esports teams in numerous well-known games including League of Legends, Counter-Strike, Heroes of Warcraft etc. In 2019 the company had a valuation of $400 million but given the huge growth in this sector (see our previous report for more insight), the future looks promising.
The Athletic is a subscription sports news site. It has raised a total of around $90 million in the past, including $22 million in May at a valuation of around $300 million. Now it is reportedly raising around $50 million to propel its valuation north of $500 million according to inside sources. Two of its prominent backers include Founders Fund and Y Combinator.
“The best entrepreneurs know this: every great business is built around a secret that’s hidden from the outside. A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.”
— Peter Thiel
Thiel is a contrarian in both the investing sense of the word and in following convention. He’s a committed and lifelong Republican, openly supporting Trump in the 2016 presidential election, although less supportive of his re-run in 2020. He has publicly criticised “political correctness” but is a prominent gay venture capitalist hailing advances in tech and breaking with convention on a regular basis. With so many successes under his belt, it seems the Founders Fund portfolio is worth watching closely for the next great investment to get on board with.