What started as a side project for Spenser Skates’ old startup is now a multi-billion dollar company of its own. On Tuesday Amplitude made its public debut on the Nasdaq, exceeding investors’ expectations with a 43% jump above its expected share price.
Amplitude, which was co-founded by Skates in 2012, calls itself a “digital optimization company.” As Skates describes it, Amplitude does for websites what sabermetrics did for baseball. For those who haven’t seen or read “Moneyball,” baseball was transformed after analytics was introduced to minimize human error in the sport. Amplitude uses its analytics to find features that users like and dislike based on data.
But before Amplitude was a company, it was just a feature for Sonalight, a voice recognition app for Android that Skates co-founded with Curtis Liu. Ultimately, the already struggling Sonalight was abandoned for the more lucrative feature that became Amplitude.
“After spending more time sharing our findings with other app developers, we kept getting asked ‘how can we figure this out for our own application?’” Skates told Inside Big Data in 2015. “That’s when we decided to start Amplitude.”
Nine years later, Amplitude is worth $6.4 billion after its most recent round of funding, a $150 million Series F round in June. Its 1,200 customers include tech giants like Twitter, Square, and PayPal, as well as other major companies like Ford, Walmart, and Instacart.
The company initially priced shares at $35, but a successful opening day made shares jump to $50, making 33-year-old Skates’ stake in the company worth nearly $450 million. Amplitude opted for a direct listing over an IPO, calling the more traditional route “antiquated” in an interview with MarketWatch.
Tech companies have increasingly gone the direct listing route, with Amplitude being the sixth major company this year to shy away from an IPO. When Spotify went public through a direct listing in 2018, it unwittingly started a trend that continued with Slack in 2019 and Palantir and Asana in 2020. This year’s biggest direct listings include Coinbase, Roblox, Wise, Squarespace, and Warby Parker, which is set to make its public debut on the New York Stock Exchange this week.