Navan, the corporate travel and spending platform, ended its first day of trading on the Nasdaq on Thursday with a 20% drop from its IPO price of $25, resulting in a valuation of approximately $4.7 billion for the 10-year-old company.
The company was the first to use a new SEC rule that allows public listings during a government shutdown.
Unlike the traditional IPO route, which requires SEC regulators to review and grant final approval, companies using the alternative closing solution can obtain automatic approval for their IPO documents 20 days after filing their price range, effectively avoiding the need for manual SEC approval.
But the updated mechanism carries a risk: The government can examine the documents later. If the SEC later finds material deficiencies or undisclosed issues, the company may be forced to amend its statements, which could lead to a lower stock price and even potential litigation.
Despite this risk, Navan decided to proceed with its IPO, primarily because most of its registration statements had already been reviewed by SEC staff before the government shutdown began on October 1.
The stock’s initial drop is likely influenced, at least in part, by this regulatory uncertainty.
Other IPO contenders are closely monitoring the market reaction to Navan’s offering. Startups looking to go public before the end of the year must decide early whether they are ready to deal with the regulatory unknowns or delay their filing until next year.
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Navan has been waiting to go public for several years. The company reportedly filed its confidential IPO paperwork in 2022 and planned to debut at a valuation of $12 billion in early 2023.
The company, formerly known as TripActions, was last valued at $9.2 billion when it raised a $154 million Series G round in October 2022.
Navan’s clients include Shopify, Zoom, Wayfair, OpenAI and Thomson Reuters. The company says its AI-powered assistant, Ava, handles about 50% of customer conversations related to booking or changing flight, hotel, and car rental reservations. Navan’s expense management solution helps companies manage employee expenses through features such as automated receipt scanning and categorization.
The company generated revenue of $613 million in the last 12 months (up 32%), with losses of $188 million, according to is S1.
Navan’s largest venture capital backers before its IPO included Lightspeed (with a 24.8% stake), solo VC Oren Zeev (18.6% stake), Andreessen Horowitz (12.6%), and Greenoaks (7.1%).
