Navan, the corporate travel and expense management platform, saw its shares tumble 20% on Nasdaq following its initial public offering (IPO) Thursday, valuing the 10-year-old company at approximately $4.7 billion.
The listing was historic: Navan became the first company to leverage a new SEC rule allowing public offerings to proceed during a government shutdown.
SEC Shutdown Workaround: Faster, But Risky
Unlike the traditional IPO process, which requires regulators to manually review and approve filings, the shutdown workaround permits companies to receive automatic approval 20 days after submitting their price range. The SEC does not have to conduct a review immediately.
However, the mechanism comes with risks. The SEC can still review filings retrospectively. If regulators later determine that statements contain material errors or undisclosed issues, the company may be compelled to revise its filings. Such amendments could further depress the stock price and even trigger potential legal challenges.
Despite these risks, Navan proceeded with its IPO. Much of its registration paperwork had already been reviewed by SEC staff prior to the government shutdown on October 1, providing some reassurance to investors. Analysts suggest that the regulatory uncertainty may have contributed to the stock’s initial decline.
Market watchers are closely monitoring Navan’s performance, as other startups planning year-end IPOs must decide whether to navigate this uncertainty or postpone their filings until next year.
A Long-Awaited Public Debut
Navan has been preparing to go public for several years. The company initially filed confidential IPO paperwork in 2022 and had targeted a $12 billion valuation for an early 2023 debut. Formerly known as TripActions, Navan was last valued at $9.2 billion during its $154 million Series G funding round in October 2022.
Navan serves major clients including Shopify, Zoom, Wayfair, OpenAI, and Thomson Reuters. Its AI-powered assistant, Ava, reportedly handles roughly 50% of customer interactions related to flight, hotel, and car rental bookings. Additionally, Navan’s expense management solution automates receipt scanning and categorization, simplifying corporate expense workflows.
Over the last 12 months, Navan generated $613 million in revenue, a 32% increase year-over-year, but reported losses of $188 million, according to its S-1 filing.
Backers and Ownership
Before the IPO, Navan’s largest venture capital investors included Lightspeed with a 24.8% stake, solo VC Oren Zeev holding 18.6%, Andreessen Horowitz with 12.6%, and Greenoaks at 7.1%.
The IPO’s performance is expected to influence the decisions of other startups considering going public before the end of the year, particularly given the new regulatory uncertainty introduced by the SEC shutdown workaround.
What Navan’s Debut Means for the Market
Navan’s public listing highlights the growing demand for corporate travel and expense management solutions, as businesses increasingly rely on AI-driven tools to streamline bookings and financial tracking. At the same time, the IPO underscores the complexities of navigating public listings in volatile regulatory environments.
The use of the SEC shutdown workaround, while innovative, introduces a layer of uncertainty that investors and future IPO candidates must weigh carefully. Nevertheless, Navan’s debut represents a milestone in the evolution of the corporate travel tech sector, offering insight into both investor appetite and the challenges of scaling a publicly traded company under unconventional regulatory conditions.
As Navan moves forward, its performance will likely set the tone for other startups weighing the risks and opportunities of going public amid regulatory constraints, balancing growth ambitions with legal and financial prudence.
