Asana Goes Public Today

Written by Jennifer Clark
Posted September 30, 2020

Software project management company Asana will begin trading on the NYSE today, Wednesday, September 30. A public debut by the company has been highly anticipated and now it has arrived. Let’s take a deeper look at the company and how it plans to go public this week.

The San Francisco, California-based software company was founded to create business-collaboration tools that would improve the way people work together across all types of geographies throughout the company or organization. You’ve probably experienced having to track down someone you work with to find out the status of their task on a project that you’re also working on. The time and energy spent tracking down that information and following up can be tiresome. It’s also not efficient.

Asana’s software provides its communication and collaboration software to businesses and organizations of all sizes. Its software has been extremely beneficial to companies, especially during COVID-19 since so many people are working remotely. Companies needed to find a way to stay on track and keep their employees communicating effectively. There have been speculations that remote work could become the “new normal" when the world is post-pandemic. That would put Asana in a unique position and allow for Asana’s software to help fulfill that demand. Asana’s software includes project management, workflow management, calendar, remote teams, productivity, and agile and scrum. 

Ahead of its public debut, it had received at least $250 million from investors, including Benchmark, Generation IM Climate Solutions, and Founders Fund. According to the company’s financials, Asana’s dollar-based net revenue retention rate was 120% for the fiscal year that ended on January 31, 2020 — increasing from 110% the previous fiscal year. Most often, a retention rate of greater than 100% shows the company has been increasing its revenue from the same customer over time, which ultimately shows that Asana has a strong product that works and fits within its market and the demands of that market.

According to a 2019 market research report by MarketsandMarkets, the global market for enterprise collaboration was estimated to be $31 billion in 2019 and is expected to reach $48.1 billion by 2024 — that represents a forecast CAGR of 9.2% from 2019 to 2024. A few of Asana's competitors are Slack Technologies (NYSE: WORK), Trello, monday.com, Atlassian (NASDAQ: TEAM), Smartsheet (NYSE: SMAR), Wrike, Microsoft (NASDAQ: MSFT), and Airtable. So while the market is growing and the demand for this type of software is high right now, there are a few companies within the market that have a strong grasp on the enterprise-collaboration market. Having effective and foolproof software is key to gaining market share.

According to Asana’s recently disclosed financials, as of July 31, 2020, it had $455.9 million in cash and equivalents. It also had $589.7 million in total liabilities. It appears that Asana has been increasing its top-line revenue, along with growing its gross profit and gross margin, which is excellent to see. Not to mention Asana’s financials indicate that the company has been able to reduce its negative operating margin.

On Wednesday, September 30, Asana has decided to make its public debut through a direct listing. It will list its Class A shares on the NYSE with the ticker symbol "ASAN." Because the company is going public through a direct listing, it will not be receiving any proceeds from the list. A direct listing gives its registered shareholders the option of selling their shares, and they will receive proceeds from the sale of their shares. The listed advisers to Asana’s public debut are Morgan Stanley, JP Morgan, Credit Suisse, and Jefferies. It’s expected that shares could open the market on Wednesday, September 30, at $28 per share. 

A direct listing like this could prove to be beneficial to interested investors. While $28 per share could be a little pricey, the company has been growing fast but not too fast. Not to mention it has been able to withstand the COVID-19 pandemic, which could pave the way to an even stronger future.

Until next time, 

Jennifer Clark
Pro Trader Today
 
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