Navan, the platform for corporate travel and expenses, concluded its initial day of trading on the Nasdaq Thursday with a 20% decrease from its $25 initial public offering price, leading to a valuation of roughly $4.7 billion for the decade-old firm.
The company pioneered the use of a novel SEC regulation that permits public listings during a government shutdown.
In contrast to the conventional IPO route, which necessitates review and ultimate approval by SEC regulators, companies employing the shutdown workaround can secure automatic clearance for their IPO documents 20 days after submitting their price range, essentially circumventing the requirement for SEC’s manual sign-off.
However, this updated mechanism entails a certain risk: the government retains the ability to scrutinize the documents at a later time. Should the SEC subsequently identify significant deficiencies or undisclosed matters, the company might be compelled to revise its statements, potentially resulting in a diminished stock price and even the possibility of legal action.
Notwithstanding this risk, Navan opted to proceed with its IPO, largely because a substantial portion of its registration statements had already undergone review by the SEC staff prior to the commencement of the government shutdown on October 1.
The stock’s opening decline is probably, at least in part, affected by this regulatory ambiguity.
The market’s response to Navan’s offering is under close observation by other prospective IPO candidates. Startups aiming to go public before year’s end must soon determine whether they are prepared to navigate the regulatory uncertainties or postpone their filing until the following year.
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Navan has been awaiting its public debut for a number of years. The company had reportedly submitted its confidential IPO paperwork in 2022 and anticipated launching at a $12 billion valuation in early 2023.
The company, previously known as TripActions, was last valued at $9.2 billion when it secured $154 million in a Series G round in October 2022.
Navan’s clientele encompasses Shopify, Zoom, Wayfair, OpenAI, and Thomson Reuters. The company asserts that Ava, its AI-driven assistant, manages roughly 50% of customer interactions pertaining to booking or altering flight, hotel, and car rental reservations. Navan’s expense management tool aids businesses in overseeing employee expenses via functionalities like automated receipt scanning and categorization.
The company reported $613 million in revenue over the past year (a 32% increase), alongside losses of $188 million, according to its S1.
Prior to its IPO, Navan’s principal venture capital investors included Lightspeed (holding a 24.8% share), solo VC Oren Zeev (18.6% share), Andreessen Horowitz (12.6%), and Greenoaks (7.1%).
