Vahe Kuzoyan, president & co-founder of ServiceTitan, poses for photos after ringing the opening bell at the Nasdaq MarketSite on Dec. 12, 2024.
Michael M. Santiago | Getty Images News | Getty Images
ServiceTitan shares popped 42% in their Nasdaq debut on Thursday after the provider of cloud software to contractors raised around $625 million in its initial public offering.
The company, trading under ticker symbol TTAN, sold shares at $71 apiece on Wednesday, above the expected range. The stock opened at $101. Based on its IPO price, the company’s market cap was about $6.3 billion.
ServiceTitan’s IPO is notable because few tech companies have taken the leap into the public market since late 2021, when rising interest rates and soaring inflation pushed investors out of risky assets. ServiceTitan is the first significant venture-backed tech company to go public since Rubrik’s debut in April. A month before that, Reddit started trading on the New York Stock Exchange.
Other companies have suggested an IPO could be coming soon. Chipmaker Cerebras filed to go public in September, but the process was slowed down due to a review by the Treasury Department’s Committee on Foreign Investment in the U.S., or CFIUS. Last month, online lender Klarna said it had confidentially filed IPO paperwork with the U.S. Securities and Exchange Commission.
While late-stage startups have been reluctant to take the public market leap, investors are showing a growing appetite for tech. On Wednesday, the Nasdaq Composite index closed above 20,000 for the first time. Tesla, Alphabet, Amazon and Meta all closed at records, with Apple just below its all-time high.
ServiceTitan agreed to “compounding ratchet” terms as part of a 2022 funding round that valued the company at $7.6 billion, according to its prospectus. The decision “has put ServiceTitan on the clock to go public ASAP to minimize dilution impact,” investors at venture firm Meritech Capital wrote in a blog post.
Founded in 2007 and based in Glendale, California, ServiceTitan targets businesses in plumbing, landscaping, electrical and other trades, with software for managing sales leads, recording calls, generating quotes and scheduling jobs. As of Jan. 31, it had about 8,000 customers with more than $10,000 in annualized billings.
ServiceTitan’s preliminary results for the October quarter show a net loss of about $47 million on $198.5 million in revenue. That suggests approximately 24% year-over-year revenue growth, the highest rate since mid-2023. But the company’s net loss widened from around $40 million in the October quarter last year.
Bessemer Venture Partners, TPG and Iconiq Growth are among the company’s top shareholders, alongside founders Vahe Kuzoyan and Ara Mahdessian.
At its IPO price, ServiceTitan was valued at just over 9 times trailing 12 months revenue. The WisdomTree Cloud Computing Fund, a basket of more than 60 publicly traded cloud stocks, currently trades at about 6.4 times revenue.