Project management startup Asana has filed paperwork to go public through a direct listing, the company announced Monday.
Most companies go public through an initial public offering. Crunchbase News has written about the difference between an IPO and a direct listing before, but in summary; an IPO involves steps such as setting a price range for a company’s shares, settling on a price and selling a block of shares before trading starts on the public market. A direct listing brushes off all those steps and gets straight to trading, allowing companies to save on bank fees as well.
A company best-suited for a direct listing is well known, doesn’t have a need for capital, has an experienced management team and is willing to provide financial metrics and forecasts beforehand, Nasdaq’s head of capital markets Jay Heller previously told Crunchbase News.
Asana was founded in 2009 by Dustin Moskovitz, Facebook co-founder, and Justin Rosenstein. The company has more than $213 million in total funding, according to Crunchbase, with its most recent raise being its $50 million Series E in November 2018. Its investors include Y Combinator and Founders Fund.
Spotify certainly wasn’t the first company to go public via a direct listing, but it was a catalyst to heat up the conversation around direct listings last year in the tech community. Airbnb is also reportedly considering a direct listing.
Illustration Credit: Li-Anne Dias