Workplace management software maker Asana attained a market value of about $5.5 billion after a direct listing, one of two Wednesday to go public via the initial public offering alternative.
Shares of San Francisco-based Asana, which didn’t sell any shares, opened trading in New York at $27 apiece and closed up 6.7% from that price at $28.80 a share. The $5.5 billion valuation is based on a fully diluted share count.
Palantir Technologies, the data-mining company founded by billionaire Peter Thiel, also went public via a direct listing on Wednesday, with its shares falling 5% from its opening price to $9.50 a share. Only two major companies had previously gone public through direct listings, Spotify Technology SA in 2018 and Slack Technologies Inc. last year.
Asana, whose founders include Facebook co-founder Dustin Moskovitz, was valued at $1.5 billion in a 2018 funding round led by Al Gore’s Generation Investment Management. More recently, it has fetched a valuation of about $5 billion on the secondary market, Bloomberg has reported. It has also received funding from Thiel’s Founders Funds, according to the company’s filings.
Moskovitz, Asana’s chief executive officer, said the company, which didn’t need to raise money, was attracted to the “efficient pricing” of a direct listing.
“We thought it’s a more fair, democratic process for employees and shareholders to have the opportunity for liquidity at the same time,” he said in an interview.
Moskovitz added that Asana hasn’t done any acquisitions and doesn’t see that changing.
About 40% of Asana’s revenue comes from outside the U.S. and it’s present in 190 countries, its executives said during the presentation. It has a gross margin of 87% in the first half, similar to 86% in the last fiscal year.Loss Grows
The company reported $99.7 million in revenue for the six months ended July 31, compared with $61.1 million for the same period last year. Its net loss more than doubled in that period to $76.9 million as research, sales and marketing costs shot up.
The New York Stock Exchange had set a reference price of $21 a share for the stock. Unlike the offer price in a traditional IPO, no shares changed hands at the reference price, which is intended only as a guide for investors and is needed for the stock to begin trading on the exchange.
Asana’s shares are trading under the symbol ASAN. While banks don’t underwrite shares as they do in a traditional IPO, they do serve as advisers in a direct listing. Morgan Stanley served as Asana’s lead adviser. JPMorgan Chase & Co., Credit Suisse Group AG and Jefferies Financial Group Inc. also advised Asana.