Analytics Firm Amplitude Reaches $7 Billion Valuation in Debut

(Bloomberg) -- Data analytics startup Amplitude Inc., the first of two companies going public this week through once-novel direct listings, began trading on Nasdaq at $50 a share and rose 9.6% from the opening price.

The shares closed at $54.80 Tuesday in New York trading, giving the company a market value of almost $5.8 billion. Accounting for employee stock options and similar holdings, the company is valued on a fully diluted basis at about $7 billion.

As with previous direct listings, the company didn’t raise capital by issuing new shares at a set price. Instead, current investors simply began selling the stock based on demand.

Nasdaq had assigned a reference price of $35 a share for the listing, which was a requirement for trading to begin. Unlike the share price in a standard initial public offering, the reference price is merely a guide rather than a sale price.

Amplitude joined a cadre of technology-oriented firms that have gone public through direct listings this year, including website-hosting service Squarespace Inc., cryptocurrency exchange Coinbase Global Inc. and online game maker Roblox Corp. Palantir Technologies Inc. and Asana Inc. debuted through direct listings last year, following a trail blazed by Spotify Technology SA and Slack Technologies Inc. before them.

Eyewear company Warby Parker Inc. is set to follow suit with a direct listing on Wednesday.

San Francisco-based Amplitude works with customers such as Ford Motor Co., Burger King and Gap Inc. to optimize their products and track customer interactions.

The digital transformation that accelerated during the coronavirus pandemic benefited Amplitude. The company’s revenue for the first six months of the year grew to $72 million from $46 million during the same period in 2020, while its net loss held steady at about $16.5 million, according to its filings with the U.S. Securities and Exchange Commission.

The company’s largest investors include Battery Ventures, Benchmark Capital Partners, Institutional Venture Partners, Sequoia Capital and their affiliates, according to the filings.

Benchmark general partner Eric Vishria, an Amplitude board member, credits the company’s growth to investing heavily in the database back end to deliver what he describes as a faster, better and lower-cost product. Benchmark has also championed the benefits of a direct listing, he said.

“At the end of the day, it’s just a better and simpler way to go public for most companies,” Vishria said. “The traditional IPO process shepherded by bankers means companies are often leaving money on the table, plus paying hefty fees on top.”

While banks don’t serve as underwriters as they do in IPOs, Morgan Stanley and other banks advised Amplitude on the listing of its stock. The shares are trading on Nasdaq under the symbol AMPL.

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