Amplitude valued at $5 billion after shares jump in Nasdaq debut
San Francisco-based Amplitude, which confidentially filed for a direct listing in July, was valued at $4 billion after raising $150 million from Sequoia Capital and Singapore’s GIC in June. On Wednesday, Its stock opened at $50/share, up from the reference price of $35.
Amplitude provides data analytics tools that enable companies to optimise their products. Its customers include NBCUniversal, PayPal Holdings Ltd, Peloton Interactive Inc and Instacart. It has benefited from the accelerated digital transformation during the Covid-19 pandemic, as companies seek to optimise customer experience by using analytical tools. It reported a loss of $16.5 million in the six months ended June 30 on the back of revenue that rose 56% year-on-year to $72 million.
The seven-year-old company chose to go public through a direct listing, an alternative to an initial public offering that has gained traction among companies after Spotify Technology SA pioneered it in 2018.
In a direct listing, companies are allowed to list on the stock market without selling shares. They set a reference price but no shares are sold in advance at that price, unlike in an IPO where shares are sold to institutional investors at a set price.
“Traditional IPOs severely under-price companies,” said Spenser Skates, cofounder and chief executive at Amplitude who has been a proponent of direct listing. “There’s a great window for companies to go out this year. This is about as fast as we could do it.”
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Investors see Amplitude’s strong debut as a catalyst for other technology companies who are exploring ways to go public.
“This is a watershed moment for direct listings. I think entire market is looking at Amplitude to see how it does, because it looks like many of the software companies that will go public in the next 12-18 months in terms of size, growth and not being well-known household names,” said Neeraj Agrawal, partner at Battery Ventures, an early investor in Amplitude.
Reuters’ Niket Nishant in Bengaluru contributed to this story.