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Amplitude valued at $5Bn after a 43% jump in shares with Nasdaq IPO

Amplitude valued at $5Bn after a 43% jump in shares with Nasdaq IPO

Shares of Amplitude, a US-based analytics tools provider, reportedly opened around 43% higher than their reference price in the company’s Nasdaq debut earlier this week, valuing the data analytics business at around $5 billion.

Amplitude, located in San Francisco, California, was valued at $4 billion when it confidentially registered for a direct listing in July 2021 after securing $150 million through fundraising in June 2021 from Sequoia Capital and Singapore's GIC.

The firm's stock started at $50 per share, up from the previous reference price of $35 per share.

Amplitude offers data analytics tools that help businesses optimize their products. Leading global organizations such as PayPal Holdings, NBCUniversal, Instacart Peloton Interactive are among its clients.

the company has benefitted from the fast digital transformation trend kicked off by the COVID-19 pandemic, as businesses began seeking ways to improve consumer experience online through the use of analytical tools.

It recorded revenues of $72 million for the first six months of the year, a 56% increase year on year, compared to a loss of $16.5 million.

The seven-year-old firm opted to go public via a direct listing, an alternative to an IPO that has gained momentum among firms after Spotify Technology popularized it in 2018.

Companies can list on the stock exchange without selling shares through a direct listing. They designate a reference price, but no shares are offered in advance at that price, as opposed to an IPO, when shares are sold to institutional investors at a fixed price.

Spenser Skates, CEO and Co-Founder of Amplitude, who has been a supporter of a direct listing, has stated that traditional IPOs grossly underprices firms. Skates added that this year brough a lucrative window of opportunity for businesses to expand and this method is about as fast as anyone can do so.

Investors view Amplitude's good launch as a stimulus for other technology companies looking to go public.

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