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Amplitude, Inc.

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Amplitude, Inc.
Company typePublic
Nasdaq: AMPL
Founded2014; 10 years ago (2014)
Founder
  • Spenser Skates
  • Curtis Liu
ProductsAmplitude Analytics
Websitehttps://amplitude.com

Amplitude, Inc. is an American publicly trading company that develops digital analytics software.[1] The company was listed publicly on the Nasdaq stock exchange under the ticker symbol AMPL on September 28, 2021, at a market capitalization of $7.1 billion after its first day of trading.[2]

History

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The company's founders, Spenser Skates and Curtis Liu, originally created a company under the name Sonalight in 2012. Sonalight produces an Android app that enabled users to send text messages via voice. Along the way, they created analytics software to help them understand how users were using the app. That software received interest from other companies with similar needs, and the founders shifted their focus to building that software into a product via a new company called Amplitude.[2]

Amplitude Inc. was founded in 2014.[3] The company's first product, Amplitude Analytics, was listed as the #22 software product in 2021 by popular review site G2 Crowd.[4] The addition of their Amplitude Recommend, and Amplitude Experiment products enabled what the company calls its Digital Optimization System. On March 10, 2020, they acquired ClearBrain,[5] a predictive analytics company founded in 2016 by Bilal Mahmood, and Eric Pollmann.[6] The following year on May 12, 2021, they acquired Iteratively, a data pipeline company[7] founded in 2019 by Patrick Thompson and Ondrej Hrebicek.

The company held their public offering on the Nasdaq stock exchange on September 28, 2021.[8]

Early IPO

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After several other rounds of funding, in June 2021 the company received $150 million in its final private investment led by the venture capital firm Sequoia Capital at a valuation of $4 billion.[9] Despite the recent funding, the company's CEO decided to take Amplitude public because he believed it would make the company stronger as Facebook founder Mark Zuckerberg had claimed after Facebook's IPO. Despite the company's age at nine years, this decision was viewed as a reversal from the trend of tech companies staying private for as long as possible. The company's ample funding would have allowed them to freely choose either path, public or private, highlighting the break from the prior norm.[10]

Direct listing

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Amplitude was also the subject of much discussion for its unusual choice of a direct public offering as it approached IPO.[11] This decision was seen as paving the way for yet more direct public offerings, another break from recent norms. Spenser Skates, the company's CEO, stated that he viewed the selection of this style of IPO to be necessary for all companies, noting the high cost of the under-pricing which is typical of standard IPOs. However, a direct public listing was at least partly enabled by the company's $300 million cash on hand, meaning the company did not need to raise significant funds from their IPO. Not all other companies can afford this choice.[12] Still, their direct listing was described as "a watershed moment for direct listings" and it was noted that "the entire market is looking at Amplitude."[13] They held their public offering on the Nasdaq stock exchange on September 28, 2021. The first day of trading increased the company's value from $5 billion to $7.1 billion, leading the CEO of the company to claim that traditional IPOs are antiquated,[14] and "the craziest thing in the world."[15]

Skates has stated that he did at least briefly consider going public via SPAC. However, he decided against the move because he believed SPACs are an "end run around SEC rules."[16]

Company growth

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Amplitude benefited from the increasing trend of businesses moving toward digital services during the COVID-19 pandemic, including prominent customers Ford Motor Co., Burger King and Gap Inc. At the time of IPO, they reported $72 million in revenue for the first half of 2021, a year over year increase of 56%.[17] After going public, the company has stated that they now have 490 employees across the US, Europe and Asia, and they count 26 of the Fortune 100 as customers.[18]

Products

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The company's analytics products include Amplitude Analytics, Amplitude Recommend, and Amplitude Experiment, which the company collectively refers to as a Digital Optimization System for businesses.[18]

Their first product, Amplitude Analytics, was designed to help software product developers better understand behavior of their users. It has been called the "Moneyball" for product development due to its focus on providing product developers with greater statistical understanding of user behavior.[2] Their additional products also enable product developers to more easily test experimental product changes, and more easily create personalized experiences and in-product recommendations.[citation needed]

References

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  1. ^ "Amplitude Inc". BLoomberg. Retrieved October 25, 2021.
  2. ^ a b c "Amplitude's direct listing is at least the sixth this year as the IPO alternative gains traction in tech". CNBC. September 28, 2021. Retrieved October 14, 2021.
  3. ^ "Fast-Growing Analytics Startup Amplitude, Founded By Forbes 30 Under 30 Alums, Files To Go Public". Forbes. June 14, 2021. Retrieved October 15, 2021.
  4. ^ "Best Software Products for 2021". Amplitude. Retrieved October 15, 2021.
  5. ^ "Sequoia Capital-backed Amplitude makes its first acquisition with this startup". San Francisco Business Times. March 10, 2020. Retrieved October 15, 2021 – via bizjournals.com.
  6. ^ "ClearBrain uses AI to help advertisers target the right users". TechCrunch+. February 7, 2018. Retrieved October 15, 2021.
  7. ^ "Amplitude acquires Iteratively". TechCrunch. Retrieved October 15, 2021.
  8. ^ Bowman, Jeremy (October 1, 2021). "Why Amplitude Went Public Through a Direct Listing Instead of an IPO".
  9. ^ "Analytics Startup Amplitude Valued at $4 Billion in Sequoia-Led Funding Round". bloomberg.com. June 9, 2021. Retrieved October 15, 2021.
  10. ^ "Amplitude CEO's ode to scrutiny ahead of going public". Fortune. September 28, 2001. Retrieved October 15, 2021.
  11. ^ "Going public? Here is a how-to guide". The Economist. October 2, 2021. Retrieved October 17, 2021.
  12. ^ Bowman, Jeremy (October 1, 2021). "Why Amplitude Went Public Through a Direct Listing Instead of an IPO". Motley Fool. Retrieved October 15, 2021.
  13. ^ "Amplitude valued at $5 bln after shares jump in Nasdaq debut". Reuters. September 28, 2021. Retrieved October 17, 2021.
  14. ^ Bary, Emily (September 28, 2021). "Amplitude stock surges in software company's public debut as a direct listing; traditional IPOs are 'antiquated,' says CEO". MarketWatch. Retrieved October 15, 2021.
  15. ^ "Product analytics firm Amplitude's stock jumps on debut; 'I hope the traditional IPO goes away' says CEO". ZDNet. September 28, 2021. Retrieved October 17, 2021.
  16. ^ "Amplitude Shares Soar as It Opens for Trading in Direct Listing". Barrons. September 28, 2021. Retrieved October 17, 2021.
  17. ^ Roof, Katie; Tse, Crystal (September 28, 2021). "Analytics Firm Amplitude Reaches $7 Billion Valuation in Debut". bloomberg.com. Retrieved October 15, 2021.
  18. ^ a b "About Amplitude". Amplitude. Retrieved October 14, 2021.
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