A prominent hedge fund is poised to benefit from one of only a few significant IPOs during the government shutdown.
Navan, which describes itself as an all-in-one travel, corporate card, and expense management company, filed plans to sell nearly 37 million shares for $24 to $26 each, according to its latest regulatory filing. Of this total, 30 million shares are being sold by the company and more than 6.9 million shares by selling shareholders. At the midpoint range, Navan would raise $750 million in the largest IPO since Alliance Laundry raised $826 million earlier this month, says Renaissance Capital.
No hedge fund is a 5 percent owner of Navan. The largest investors before the offering were Lightspeed Venture Partners, which owns 24.8 percent of the Class A shares; Zeev Ventures, 18.6 percent; Andreessen Horowitz, 12.6 percent; and Greenoaks, 7.1 percent. None of these firms is selling shares in the offering.
In October 2022, Tiger Cub Coatue Management played a prominent role in the company’s Series G financing, which valued the company at $9.2 billion. It included $154 million in equity from new and existing investors as well as a $150 million structured capital transaction led by Coatue, per a press release at the time. In addition, Dan Rose, chairman of Coatue Ventures, joined the board of directors as an observer. Although Navan lists Coatue on its website as a backer, the firm is not included among the 5 percent holders.
Few companies have gone public since the government shutdown. The Securities and Exchange Commission says on its website that it will have “a very limited number of staff members available” and that they will “respond to emergency situations with a focus on the market integrity and investor protection components of our mission.” It stressed that its Edgar filing system will continue to operate as usual.
In an October 27 memo addressing IPOs, law firm David Polk said that during the shutdown, a company with a registration statement pending before the SEC can complete its IPO during the shutdown under particular circumstances.
The company must file the registration statement publicly or file an amendment to an already public registration statement without the “delaying amendment,” which the law firm calls “the confusing but seldom-noticed language at the very bottom of the cover page.”
“These steps are consistent with the federal securities laws and recent SEC guidance relating to capital markets transactions while the SEC is closed for business,” the law firm says in its memo. “This approach is simple for a company with no or few outstanding SEC comments. But the path is trickier for companies with a number of outstanding SEC comments, or companies [that] have not yet received SEC comments.”
