San Francisco-based Amplitude, which confidentially filed for a direct listing in July, was valued at $4 billion in June after raising $150 million from Sequoia Capital and Singapore’s GIC. On Wednesday, its stock opened at $50/share, well above the reference price of $35.
Amplitude provides data analytics tools that enable companies to optimize their products. Its clients include NBCUniversal, PayPal Holdings Ltd, Peloton Interactive Inc and Instacart. It has benefited from accelerated digital transformation during the COVID-19 pandemic, as companies seek to optimize the customer experience using analytical tools. It reported a loss of $16.5 million on the back of revenue for the six months ended June 30 that grew 56% year-over-year to $72 million.
The seven-year-old company opted to go public via direct listing, an alternative to an initial public offering that has gained traction among companies since being pioneered in 2018 by Spotify Technology SA.
In direct listing, companies are allowed to get listed on the stock exchange without selling the shares. They set a reference price but no shares are sold upfront at that price, unlike an IPO where shares are sold to institutional investors at a set price.
“Traditional IPOs seriously undervalue companies,” said spencer skates, cofounder and CEO of Amplitude who has been a proponent of direct listings. “This year is a great window for companies to go out. This is as fast as we could.”
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Investors see Amplitude’s strong debut as a catalyst for other technology companies looking to go public.
“This is a watershed moment for direct listings. I think the whole market is looking at Amplitude to see how it does, because it looks like a lot of software companies that are going to grow over the next 12-18 months in terms of size, growth And not being a well-known household name, said Neeraj Agarwal, partner at Battery Ventures, an early investor in Amplitude.
Niket Nishant of Reuters in Bengaluru contributed to this story.