ServiceTitan's IPO Kicks Off with a 42% Surge
Housing and commercial repair software provider ServiceTitan Inc. experienced a significant increase in its stock value during its initial public offering (IPO), opening at $101, which is 42% above the offering price of $71. This marks the largest opening increase for a U.S. IPO since March's debut of Astera Labs Inc., which raised over $400 million.
The Glendale, California-based company managed to raise $624.8 million through the IPO, positioning ServiceTitan at a market value of approximately $9 billion. When accounting for stock options and restricted stock units, the valuation reaches approximately $10 billion. This valuation represents a significant increase from the $7.6 billion valuation following a funding round in 2022 and is slightly above the peak valuation of $9.5 billion during the 2021 boom.
Initially setting the price range for its shares at $65 to $67, ServiceTitan later raised this range, reflecting investor confidence in the company's growth prospects, broad market potential, and comprehensive software offerings. The company's platform is designed to streamline various tasks, including scheduling, dispatch, and financing, aimed at increasing the efficiency of construction projects and service visits.
The company's co-founders, CEO Ara Mahdessian and President Vahe Kuzoyan, are preparing to maintain voting control through Class B shares post-IPO. Among major shareholders in the company following the offering are ICONIQ Growth, which holds 20.5% of Class A shares, Bessemer Venture Partners with 11.9%, TPG Inc. with 7.2%, and Battery Ventures with 6.4%.
ServiceTitan's financial performance shows growth; the company reported approximately $614 million in annual revenue for the fiscal year 2024, reflecting a 31% year-over-year increase. Despite this growth, the company reported a net loss of approximately $195 million, showing an improvement from the $270 million loss reported in the fiscal year 2023.
The IPO was led by a consortium of financial institutions that includes Goldman Sachs Group Inc., Morgan Stanley, Wells Fargo & Co., and Citigroup Inc., among 10 other banks. ServiceTitan's shares are currently traded on the NASDAQ Global Select Market under the symbol TTAN.