Asana (ASAN)

Asana is a recent Tech IPO that went public in September 2020. They are a software company in San Francisco with around 1,200 employees. Over 89,000 companies around the world use Asana to improve their work management and work flow. Since Asana is a recent IPO, you have the opportunity to get in early and start a position. I have a small position in Asana and I am adding to it over time. Asana is the type of stock I will hold for 3-5 years. If they continue to grow at impressive rates, I will hold Asana stock for longer than 5 years.

“Asana is a leading work management platform that helps teams orchestrate their work, from daily tasks to strategic initiatives. Asana adds structure to unstructured work, creating clarity, transparency and accountability to everyone within an organization—individuals, team leads and executives—so they understand exactly who is doing what, by when.” — Asana Investor Relations

Key Data on Asana from recent Q3 FY 2021

• Q3 Revenue was $58.9 million, an increase 55% YoY

• Over 89,000 paying customers

• Customers spending $50,000 or more on an annualized basis grew to 318, an increase of 104% YoY

• DBNER was over 115%

• Fortune rated Asana a “Best” places to work

Asana has been growing revenue around 50-55% YoY for the last two quarters so this places Asana in the high growth category. They also have a significant footprint in the business world with over 89,000 paying customers. They are doing a great job getting customers to spend more since customers spending $50K plus is growing at a much faster rate. These high value Enterprise customers are key to their success and a key reason I am bullish on Asana.

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Land and Expand

Asana has a land and expand sales model for selling licenses to companies. This means that many companies and organizations might start with a small deployment of Asana to certain teams like marketing, operations, or creatives. Over time, the Asana sales reps will help build the business case for a larger deployment and eventually a full company wide roll out. This is the same sales model that is used at Slack and many other popular Tech companies.

In the image below, you can see an example of land and expand. The example company started with 50 seats (licenses) of Asana and expanded over the years. After 5 years, they had a full deployment of over 3,000 Asana licenses. The sales and account management team at Asana would help the customer expand over the years.

Growth Plans at Asana

Asana is still a relatively small Tech company since they have 1,200 employees total. As a comparison, Salesforce has over 47,000 employees so it is still early days for Asana and their future growth plans. There are still many companies and organizations that do not use Asana or they have a small deployment. Asana can help companies find more company wide use cases, up-sell existing customers to larger deployments, and create new products. As they grow, Asana may find new companies for mergers or acquisitions to help fuel their growth around the world.

Key Considerations

• Asana is growing faster for companies that are spending over $50K per year. This means that larger companies and organizations are find value in Asana software and they are expanding accounts. This is a strong sign that points to future growth with their land and expand sales model.

• Asana has won awards for being a Best place to work from Fortune magazine. They also have a 4.9/5 review rating on Glassdoor. This means that Asana will be able to attract high quality talent for both engineering and sales roles. This is vital for their future growth plans and should be a key consideration for investors.

• Asana is a recent IPO since they went public in September of 2020. This offers investors a chance to get in early. The stock is up around 34% since IPO so it has not had a huge run up.

ABOUT ME

James Carter is an investor and writer based in Washington, DC. He spent 8 years working in high growth Tech companies on sales and marketing teams. Now he is a full time investor, writer, and options trader sharing his ideas and perspective on high growth Tech. Follow me on Twitter here. Please see the special offer for 10% off the 1 year subscription to SCALE 89.

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Disclosure: Not Financial Advice

James Carter/SCALE 89/The Author does NOT provide financial, investment, legal or tax advice. None of my content can be construed as advice. The author is not advising you to buy or sell a security. This newsletter, article and my tweets are for informational and educational purposes only.

James Carter currently owns shares of Asana (ASAN).

Images: The images are from the Asana Investor Relations