Navan: travel expense specialist plots costly claim on equity market

Few office activities are drearier than claiming expenses. All that remains of a swashbuckling sales trip or ego-boosting conference speech is a pile of crumpled receipts.

US travel software company Navan aims to reduce the misery. The universal appeal of that proposition — and the pixie dust of an OpenAI tie-in — may embolden Navan to revive the moribund market for US initial public offerings.

The Palo Alto-based company survived the collapse in travel during the pandemic. It is growing quickly as trips return and has filed to go public. Business travel is forecast to reach pre-pandemic levels by the end of next year, according to Deloitte estimates.

Navan’s name is an odd combination of the words navigate and avant. It is the result of a recent, pointless rebrand from the previous name, TripActions.

Navan has struck a deal with artificial intelligence start-up OpenAI that is supposed to make the service more personal, with tailored itineraries. It could also cut employee costs one day by replacing agents with chatbots.

Right now, costs are high. To date, Navan has raised more than $1.4bn from investors including Andreessen Horowitz. It has secured more than$400mn in credit facilities. That has helped cover the acquisition of five companies in two years, including Tripeur in India.

The headcount has doubled over the same period. Navan has expanded into different types of expenses and services that provide a funding facility for customers.

Last October, the company was valued at $9.2bn. Revenues were $300mn last year, pointing to a steep trailing sales multiple of 31 times. The expense software market is led by SAP Concur, owned by German software giant SAP. SAP’s equivalent multiple is five times. Peer Booking Holdings is worth six times sales.

Navan was aiming for a $12bn valuation according to reports last year. But this growth-focused, lossmaking software company needs to remember the prosaic character of expense claims and settle for less.