The fourth in the list of companies that went public through direct listing is the job search and recruiting company – Zip Recruiter Inc. The company saw a rise of 8.5% post the trade opening. The company’s share price on Wednesday started at $20 apiece, rose to $21.69, and closed at $21.10 in New York. The company presently is valued at $2.8 billion according to the share price listing. The company has grown in valuation; in 2018, it stood at $1.5 billion in a funding round.
The other companies that went public through direct listing this year are Coin base, Roblox, and Squarespace Inc.
A reliable and robust alternative to raising capital that gained popularity in the US markets is the “Direct listing” after the approval of the New York Stock Exchange proposal by the Securities and Exchange Commission.
NYSE vice-chairman and CMO John Tuttle wrote on LinkedIn the new move “has the potential to transform the equity markets.”
Many companies chose to go public with the direct listing because it is comparatively less expensive than IPO as it doesn’t require any underwriters. Companies who don’t prefer share dilution and want to avoid lockup periods can choose a direct listing process.
Spotify Technology SA pioneered Direct listings in 2018, followed by Slack Technologies Inc, Palantir Technologies Inc., and Asana Inc.
Zip recruiter has been profitable during the pandemic, although there was a slight decrease in the revenue. The company was founded in 2010; since then, it has offered services to more than 2.5 million businesses and 110 million job seekers. Due to the surge in demand, the company is getting benefited now.
The company is a leading marketplace that connects job seekers around the world with companies. The California –based company raised $219 million in two funding rounds from Institutional Venture Partners, Industry Ventures, and Basepoint Ventures. The company acquired JobBoard.io in 2017.
The reference price assigned for the shares was $18 by New York Stock Exchange. Investors can use the reference price for their understanding of the share price.
The company sold its class B shares in the first quarter at $9 apiece. It presently has no plans for fundraising. The company is, however, in preparations for business expansion in emerging markets. In 2020, it got a net income of $86 million on $418 million revenue.