Navan IPO tumbles 20% after historic debut under SEC shutdown workaround

Navan, the corporate travel and expenses platform, ended its first day of trading on the Nasdaq on Thursday down 20% from its $25 IPO price, resulting in a valuation of about $4.7 billion for the 10-year-old company.

The company was the first to use A New SEC rules Which allows public listings during a government shutdown.

Unlike the traditional IPO path, which requires SEC regulators to review and grant final approval, companies using the closing workaround can obtain automatic approval of their IPO documents 20 days after submitting their price range, effectively bypassing the need for manual SEC approval.

But the updated mechanism carries a risk: the government could audit 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 decline in the stock price and even potential litigation.

Despite these risks, Navan decided to go ahead with the IPO, primarily because the bulk of the registration data had already been reviewed by SEC staff before the government shutdown began on October 1.

The stock’s initial decline is likely to be affected, at least in part, by regulatory uncertainty.

The market reaction to Navan’s bid is being closely watched by other IPO contenders. Startups looking to go public before the end of the year will have to decide soon whether they are prepared to deal with regulatory unknowns or delay filing until next year.

Navan has been waiting to go public for several years. The company has reportedly submitted its application Confidential subscription papers in 2022 and is scheduled to debut with a valuation of $12 billion in early 2023.

The company, formerly known as TripActions, was last valued at $9.2 billion When it raised a $154 million Series G round in October 2022.

Navan’s clients include Shopify, Zoom, Wayfair, OpenAI and Thomson Reuters. The company claims that its AI-powered assistant, Ava, handles nearly 50% of customer conversations related to booking or changing flight, hotel and car rental reservations. Navan’s expense management solution helps businesses manage employee expenses through features like automatic scanning and categorization of receipts.

The company generated revenue of $613 million over the past 12 months (up 32%), with losses of $188 million, according to Its S1.

Navan’s biggest pre-IPO venture capital backers included Lightspeed (holding a 24.8% stake), solo VC Oren Zeev (18.6% stake), Andreessen Horowitz (12.6%), and Greenoaks (7.1%).