The One Palantir SPAC Poised for Success
This article was edited by Andrew Salamon, head of content at Daily Palantir. You can follow him on Twitter here
Palantir and its SPAC Investments
Controversial, daring, and innovative - these are some of the terms that have come to define Palantir's investment strategy. The software giant made a bold move by investing in SPACs, and their decision is finally beginning to bear fruits.
The investment strategy was not embraced by all initially, but Palantir saw an opportunity. The company wanted to be at the forefront of innovation, leveraging their software to assist emerging businesses in niche markets. It was a gamble that not every company would succeed, but for Palantir, the calculated risk has started paying off.
In Q1, from the 12 remaining SPACs, which were part of the original 21 or 22 investments in late 2020, Palantir saw revenues of $38 million, contributing nearly 10% of the total $525 million. This revenue didn't come only from equity positions but also from the client companies using Palantir's products.
A Potential SPAC Winner: Lilium
One of the companies under the Palantir-SPAC umbrella is Lilium, an ambitious and innovative German startup aiming to revolutionize urban transport with its all-electric vertical take-off and landing (eVTOL) jets. However, like any emerging tech company, Lilium is considered a highly speculative investment and should be treated with caution.
Investing in Lilium, or any other similar company, is a personal decision and should be based on your risk tolerance. One way to indirectly invest in these companies could be through Palantir itself. Given Palantir's existing exposure and potential for further growth, this could be a safer route for some investors.
The recent news about Lilium's expansion in China is particularly intriguing. The Bowen District of Shenzhen municipality and Lilium have inked a memorandum of understanding (MOU) to open a regional headquarters, marking the company's first steps in China's vast market. This partnership is a strategic move aimed at establishing a safe and sustainable eVTOL service in China with the Lilium jet.
As a pilot project, the partnership will focus on the Guangdong-Hong Kong-Macao Greater Bay Area, home to over 85 million people. Their future plans include expanding across China and the broader Asia-Pacific region. Despite concerns around China's stringent policies, the potential to cater to the country's 1.3 billion population, specifically with regards to transportation, can't be dismissed.
The Lilium jet, which is already attracting attention due to its futuristic design, has the potential to transform the way we travel. Its electric functionality and capacity to fly high above urban landscapes make it a perfect fit for China's densely populated urban centers.
The eVTOL market is projected to grow significantly, reaching an estimated $30 billion by 2030. If Lilium, backed by Palantir, becomes one of the top players in the field, it could claim a sizable share of this burgeoning market. The company's current market cap stands at $540 million, making it an intriguing prospect for investors.
So, why does Palantir's investment in companies like Lilium matter? It shows the software giant's foresight and willingness to take calculated risks in emerging tech sectors. Whether Lilium and similar companies will ultimately succeed is uncertain, but what's clear is that Palantir's strategic investments are shaping the future of technology. And that's worth watching.
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