Navan, the corporate travel and expense platform, finished its first day of trading on the Nasdaq on Thursday down twenty percent from its twenty-five dollar IPO price. This resulted in a valuation of approximately four point seven billion dollars for the ten-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 path, which requires SEC regulators to review and grant final approval, companies using this shutdown workaround can get automatic approval for their IPO documents twenty days after submitting their price range. This process effectively bypasses the need for manual SEC approval.
However, the updated mechanism carries a risk. The government can scrutinize 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. This was primarily because the bulk of its registration statements had already been reviewed by the SEC staff before the government shutdown began on October first. The stock’s initial decline is likely influenced, at least in part, by this regulatory uncertainty.
The market’s reaction to Navan’s offering is being closely monitored by other IPO contenders. Startups looking to go public before the end of the year need to decide soon whether they are ready to deal with the regulatory unknowns or delay their filing until the next year.
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 twelve billion dollar valuation in early 2023. The company, formerly known as TripActions, was last valued at nine point two billion dollars when it raised a one hundred fifty-four million dollar Series G round in October 2022.
Navan customers include Shopify, Zoom, Wayfair, OpenAI, and Thomson Reuters. The company claims that its AI-powered assistant, Ava, handles approximately fifty percent 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 revenue of six hundred thirteen million dollars over the last twelve months, which is up thirty-two percent, with losses of one hundred eighty-eight million dollars.
Navan’s largest venture capital backers before its IPO included Lightspeed, holding a twenty-four point eight percent stake, solo VC Oren Zeev with an eighteen point six percent stake, Andreessen Horowitz with twelve point six percent, and Greenoaks with seven point one percent.