Asana valued at US$5.5B after debut

One of two firms to go public via direct listing

Workplace management software maker Asana Inc. attained a market value of about US$5.5 billion after a direct listing, one of two Wednesday to go public via the initial public offering alternative.

Shares of San Francisco-based As ana, which didn’ t sell any shares, opened trading in New York at US$27 apiece and closed up 6.7 per cent from that price at US$28.80 a share. The US$5.5 billion valuation is based on a fully diluted share count.

Palantir Technologies Inc., the data-mining company founded by billionaire Peter Thiel, also went public via a direct listing on Wednesday, with its shares falling 5 per cent from its opening price to US$9.50 a share. Only two major companies had previously gone public through direct listings, Spotify Technology SA in 2018 and Slack Technologies Inc. last year.

Asana, whose founders include Facebook Inc. cofounder Dustin Moskovitz, was valued at US$1.5 billion in a 2018 funding round led by Al Gore’s Generation Investment Management. More recently, it has fetched a valuation of about US$5 billion on the secondary market, Bloomberg has reported.

It has also received funding from Thiel’s Founders Funds, according to the company’s filings.

Moskovitz, Asana’s chief executive, said the company, which didn’t need to raise money, was attracted to the “efficient pricing” of a direct listing.

“We thought it’s a more fair, democratic process for employees and shareholders to have the opportunity for liquidity at the same time,” he said in an interview.

Moskovitz added that Asana hasn’t done any acquisitions and doesn’t see that changing.

About 40 per cent of Asana’s revenue comes from outside the U.S. and it’s present in 190 countries, its executives said during the presentation.

It has a gross margin of 87 per cent in the first half, similar to 86 per cent in the last fiscal year.

The company reported US$99.7 million in revenue for the six months ended July 31, compared with US$61.1 million for the same period last year. Its net loss more than doubled in that period to US$76.9 million as research, sales and marketing costs shot up.

The New York Stock Exchange had set a reference price of US$21 a share for the stock.

Unlike the offer price in a traditional IPO, no shares changed hands at the reference price, which is intended only as a guide for investors and is needed for the stock to begin trading on the exchange.