Navan, the corporate travel and expenses platform, ended its first day of trading on the Nasdaq on Thursday down 20% from its IPO price of $25, valuing the 10-year-old company at about $4.7 billion.
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 shutdown solution can receive automatic approval of their IPO documents 20 days after submitting their price range, effectively bypassing the need for manual SEC approval.
But the updated mechanism carries a risk: the government can check 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 that risk, Navan decided to go ahead with its IPO, largely because most of its registration statements had already been reviewed by SEC staff before the government shutdown began on Oct. 1.
The stock’s initial decline is likely driven, at least in part, by this regulatory uncertainty.
Market reaction to Navan’s offer is closely watched by other IPO candidates. Startups looking to go public before the end of the year must decide soon whether they’re ready to face 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 confidential IPO documents in 2022 and planned to debut at a $12 billion valuation 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 customers include Shopify, Zoom, Wayfair, OpenAI and Thomson Reuters. The company claims its AI 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 like automated receipt scanning and categorization.
The company generated $613 million in revenue over the past 12 months (up 32%), with a loss of $188 million, according to His S1.
Navan’s biggest venture capital backers before its IPO included Lightspeed (holding a 24.8% stake), solo VC Oren Zeev (18.6% stake), Andreessen Horowitz (12.6%) and Greenoaks (7.1%).
