Product intelligence platform Amplitude went public today via a direct listing. Nasdaq had set the reference price at $35, which valued the company around $4.5 billion. However, the opening trade came in at $50, valuing the company well above that amount at $6.4 billion, and above the company’s last private valuation of $4.2 billion.
We spoke with founder and CEO Spenser Skates today after he rang the bell with his team.
“[What] Salesforce has done for sales teams and Adobe has done for marketing teams, Amplitude is doing for product teams,” he said.
Amplitude provides a “cockpit for every business to figure out what’s going on in its websites and apps,” said Skates. It helps product teams understand “what features people like, what they don’t like, where they get stuck.”
The San Francisco-headquartered company was co-founded in 2012 by Skates, CTO Curtis Liu and Chief Architect Jeffrey Wang. Both Skates and Liu are listed in the S-1 filing as owning 8.7 percent and 7.7 percent, respectively.
Amplitude has 26 of the Fortune 100 as customers, including Twitter, Dropbox, Atlassian and PayPal and more traditional companies Walmart, NBC, Ford and Burger King.
For an example of Amplitude’s value, consider the insight it gave to client Peloton. What the super fitness brand learned from Amplitude was that a social experience during a workout meant a customer was more likely to work out again and make it a habit. The company introduced high fives, leaderboards and other social elements to engage people and for them to have fun while working out.
On why the company elected to do a direct listing, Skates said: “Traditional IPOs severely underprice companies. On average, the traditional IPO underpriced companies by 50 percent. Why does anyone do this?”
The gap between the reference price of $35 and the price investors were willing to pay at the opening is an example of how a traditional IPO process would have priced the shares “much much lower than what the market was actually willing to pay for our stock,” he said.
For the six months ending June 30, 2021, revenue was $72.4 million, up 57 percent from the same time frame a year earlier at $46 million according to the S-1. Net losses were $16.5 million six months into 2021, compared with $16.6 million in the first six months of 2020, according to the S-1 filing.