ZipRecruiter Adds to Tech Firms Using Direct Listings
(Bloomberg) -- ZipRecruiter Inc. filed for a direct listing on the heels of four other companies that have chosen the alternative route to going public in the past year.
The job search and recruiting company became profitable in 2020, even as its revenue declined slightly, according to its filing Friday with the U.S. Securities and Exchange Commission. Since its founding in 2010, more than 2.8 million businesses and 110 million job seekers have used ZipRecruiter, the company said.
In a direct listing, a company doesn’t raise fresh capital and existing investors can typically begin selling their shares on the first day of trading without the usual lockup period restrictions in an initial public offering. It can also save on banking fees and the time spent on an investor roadshow.
Coinbase Global Inc. is the most recent of a handful tech-oriented companies to go public through a direct listing. The cryptocurrency exchange’s listing this month was preceded in the past year by Roblox Corp., Palantir Technologies Inc. and Asana Inc.
Website-hosting service Squarespace Inc. filed last week for a direct listing. Such listings were pioneered largely by Spotify Technology SA in 2018 and Slack Technologies Inc. the following year.
ZipRecruiter, based in Santa Monica, California, was valued in a 2018 funding round at $1.5 billion. Last year, it had net income of $86 million on revenue of $418 million, compared with a net loss of $6.3 million on revenue of $430 million in 2019, according to its filing.
Chief Executive Officer Ian Siegel and other executives, along with investors such as Institutional Venture Partners and Wellington will continue to control the company through Class B shares, which carry 20 votes each compared to one each for the Class A shares to be sold to the public.
While banks don’t underwrite offerings as they do in IPOs, they do advise the company on the process. ZipRecruiter’s advisers include Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to the filing.
ZipRecruiter plans for its shares to trade on the New York Stock Exchange under the symbol ZIP.
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