Asana’s strong direct listing lights alternative path to public market for SaaS startups

Despite rising cash burn and losses, Wall Street welcomed the productivity company

This week’s pair of direct listings from Asana and Palantir were historic moments for each firm, but they also served as public business experiments.

For Palantir, the event tested how far corporate governance could be twisted while leaving a company worth buying in the eyes of public shareholders. And with Asana, its direct listing was a test of what sort of tech company can go public using the mechanism.

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Asana is not as well-known as Spotify was during its famous direct listing, nor is it growing as quickly as Slack was when it also went public using the method. But Asana had charm of its own, including good growth. The question surrounding its debut was what sort of price it could secure given its rising losses and operating cash burn, and whether it would prove attractive enough to serve as a positive harbinger for yet-private SaaS startups.

How would investors react when it started to trade? Favorably, as it turns out.

Asana’s results augur well for other SaaS startups that may not find the traditional IPO process enticing but don’t want to wager their public debut on more exotic mechanisms like blank-check companies, especially the bulk of late-stage SaaS unicorns that are still cash-hungry and far from profitable on a GAAP basis.

Asana’s debut, then, is a lit torch for late-stage SaaS startups that have access to private cash and want to trade publicly.

A direct listing success

There was much to like in Asana’s IPO filing, along with a few cautionary notes. To avoid a full recap of our prior reporting, we’ll skate through only the most salient details as reminders.