Expense management startup Navan cuts staff to find profitability ahead of delayed IPO
Navan, an expense management startup once known as TripActions, has laid off 5% of its staff, or 145 people, a spokesperson confirmed to TechCrunch today.
The Information first broke the news.
“Navan has recorded strong growth over the past three years despite the challenges affecting our industry,” the spokesperson wrote via email, describing the cuts as a “restructuring.”
She added: “We are refocusing efforts to move faster toward profitability as we enter the next phase of the company. As such, we have made the difficult decision to reduce the size of our global workforce by 5% to increase operational efficiencies as we continue to reinvent travel and expense through innovation.”
In October of 2022, Navan secured $150 million debt and raised $154 million in equity at a post-money valuation of $9.2 billion, up from its prior valuation of $7.5 billion.
That deal came weeks after the Palo Alto-based company was said to have filed confidentially to go public sometime this year at a $12 billion valuation. In August, a source told Business Insider that the company was now targeting to go public in April of 2024.
Navan once focused strictly on travel expense management but stepped up its overall spend management game at the beginning of the COVID-19 pandemic when its revenues literally hit zero.
Since then, it’s been competing with the likes of Ramp and Brex, and integrating ChatGPT into its expense reports. Notably, both Ramp and Brex expanded into travel over the past couple of years.
Navan has historically not revealed its financials but earlier this year, CEO and co-founder Ariel Cohen told TechCrunch that spend volume processed via Navan Expense in the first quarter of 2023 grew more than 3x compared to Q1 2022 — and by 4.7x when looking at the 12 consecutive months ending in March 2023, as compared to the 12 months preceding. Revenue-wise, Navan said at the time it had seen “3x YoY revenue growth.”
I also asked Cohen if Navan was still planning to go public, considering it filed confidentially to do so in September of last year. His answer: “I think eventually we will be a public company. We’ve raised around $1.4 billion to date and maturity-wise, we are there, to be public. Growth-wise, we are growing extremely fast, and a lot of our metrics would support being public. I don’t think the market is there right now.”
It is not uncommon for companies that are planning to go public to lay off staff, as such cost reductions are sometimes viewed favorably by the public markets.
Investors include Andreessen Horowitz, Base Partners, Elad Gil, Greenoaks Capital Management, Zeev Ventures, Lightspeed Ventures and Addition Ventures, among others.
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