[NEW YORK] Shares of Amplitude opened nearly 43 per cent above their reference price in their Nasdaq debut on Tuesday, notching up a valuation of about US$5 billion for the Benchmark-backed analytics company.

San Francisco-based Amplitude, which confidentially filed for a direct listing in July, was valued at US$4 billion after raising US$150 million from Sequoia Capital and Singapore's sovereign wealth fund GIC in June.

Stock of the company opened at US$50 per share, up from the reference price of US$35 per share.

Amplitude provides data analytics tools that enable companies to optimise their products. Its customers include NBCUniversal, PayPal Holdings, Peloton Interactive and Instacart.

It has benefited from the accelerated digital transformation during the pandemic, as companies seek to optimise customer experience online by using analytical tools.

It reported US$72 million in revenue for the first half of the year, a 56 per cent jump year over year, compared with a loss of US$16.5 million.

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The seven-year-old company chose to go public through a direct listing, an alternative to an initial public offering that has gain traction among companies after Spotify Technology pioneered it in 2018.

In a direct listing, companies are allowed to list on the stock market without selling shares. They set a reference price but no shares are sold in advance at that price, unlike in an IPO where shares are sold to institutional investors at a set price.

"Traditional IPOs severely under-price companies," said Spenser Skates, Amplitude co-founder and CEO, who has been a proponent of direct listing. "There's a great window for companies to go out this year. This is about as fast as we could do it."

Investors see Amplitude's strong debut as a catalyst for other tech companies who are exploring ways to go public.

"This is a watershed moment for direct listings. I think the entire market is looking at Amplitude to see how it does, because it looks like many of the software companies that will go public in the next 12 to 18 months in terms of size, growth and not being well-known household names," said Neeraj Agrawal, partner at Battery Ventures, an early investor in Amplitude.

Morgan Stanley advised Amplitude on the direct listing.

REUTERS

READ MORE: Amplitude CEO advocates direct listing to avoid 'huge' mispricing