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An IPO is like launching a boat off the dock. Sometimes you float, sometimes you sink, and sometimes you hit an iceberg. Here are three brief stories of big names still trading below their IPO prices.
Asana (ASAN): Burn, Baby Burn
Asana entered the public market through a direct listing with high growth and even higher cash burn. Sure, revenue was climbing fast, but Asana was spending a ton on customer acquisition, sometimes matching its revenue dollar-for-dollar in just marketing expenses. Investors loved the growth but started to ask, “When will this business turn a profit?”
Why: Asana operates in a crowded space, competing with Notion, ClickUp, AirTable, Monday.com (takes deep breath), Trello, Basecamp, Smartsheet (wipes sweat off forehead), Jira, Hive, and Coda. Despite the buzz, Asana struggled to differentiate enough to convince investors it could be the long-term winner. It’s different if you are spending to decisively capture a category (with high retention) vs opting into a messy knife fight (with high churn). Its aggressive spending worried those who saw no clear path to profitability, leading to stock volatility soon after the IPO.
Takeaway: In markets flooded with competitors, growth alone isn’t enough. For companies like Asana, finding a unique angle and proving you can scale profitably are must-haves in the public markets.
Fastly (FSLY): Customer Concentration Concerns
Fastly was all about high-speed content delivery at the edge, and for a while, investors were on board. But Fastly had one big Achilles’ heel: it relied heavily on just a few major clients, including TikTok. When TikTok reduced its usage of Fastly, the company’s revenue dropped, and investors bailed.
Why: The CDN space (content delivery network) is notoriously competitive, and many of Fastly’s core services overlap with those of Cloudflare, Amazon CloudFront, and Akamai. This made it hard for Fastly to command a premium without the revenue stability that diversification provides. With one major client gone, the cracks in its revenue predictability were exposed, leading to serious stock price volatility.
Takeaway: A diversified revenue base is key to earning public market confidence, particularly in industries where competition is fierce and switching costs are low. On the flip side, a company like Klaviyo has done a good job de-risking its revenue concentration on Shopify customers, which made up more than 70% of ARR at time of IPO.
Confluent (CFLT): Fighting Giants
Confluent went public with big plans to lead in real-time data streaming, riding on the popularity of Apache Kafka. But despite its early lead, it soon ran into the powerful shadow of AWS, Google Cloud, and Microsoft. These cloud giants quickly introduced their own Kafka-compatible services, which put Confluent in a tight spot, trying to justify its standalone platform while facing fierce competition.
Why: With AWS and Google bundling services at scale, Confluent’s ability to grow independently was undercut, leaving investors uncertain about its ability to sustain growth amongst giants.
Takeaway: Competing against the big three cloud providers is tough. Without a unique advantage or ability to integrate deeply across ecosystems, maintaining momentum in the public market can be even more challenging—especially when larger players can replicate or bundle similar solutions at lower costs. Scale wins here.
Final Thoughts
Asana, Fastly, and Confluent each show us that while a strong growth story is important, it’s not the whole story. Going public requires a clear, sustainable path to profitability, a unique competitive edge, and reliable revenue streams. Without these, the honeymoon phase with investors can end quickly. For CFOs and operators eyeing a future IPO, these lessons are a good reminder to show proof points that new initiatives for growth are working, and you’re actively planting the seeds for future expansion, so investors will reap the benefits. After all - stock prices are based on tomorrow’s promise, not yesterday’s results.
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