The article discusses how Navan and its UK subsidiary, Reed & Mackay, pledged intellectual property, client contract rights, and IATA agreements as collateral to secure financing ahead of a potential IPO.

• Navan leveraged intellectual property, client contract rights, and IATA agreements as collateral to secure financing, a highly unusual move in the travel sector.

• Collateralizing intangible assets helps boost liquidity or the company’s perceived financial strength ahead of its IPO, but gives lenders strong rights over key assets if the company faces trouble.

• Experts say this strategy reflects a broader trend among service and software firms, especially those relying on consistent, low-churn client bases, to use intangible collateral due to a lack of physical assets.

Professor Harris said: “It does seem like Navan is either trying to mortgage assets to remain afloat—that is, turn available assets into actual cash—or attempting to make the company appear stronger so as to be able to move ahead with the IPO.”

Read the article.