The company, which was co-founded by Facebook co-founder Dustin Moskovitz and former Facebook engineering lead Justin Rosenstein, has raised more than $213 million in total funding and was last valued at $1.5 billion, according to Crunchbase.
In a direct listing, there isn’t a capital raise through selling a block of shares to institutional investors before trading starts. Some companies choose to go this route if they don’t need to raise capital and want to save on the large bank fees that come with traditional IPOs. The common sentiment with direct listings is that they’re a good choice for companies with strong brand recognition, as there’s less effort required to convince investors to buy shares.
Direct listings are not a new method of going public by any means, but they have gained more attention recently after two high-profile startups, Spotify and Slack, chose to do direct listings. There have been reports that another well-known startup, Airbnb, will choose a direct listing when it goes public next year as well.