ServiceTitan Shares rose 42% in their Nasdaq debut Thursday after increased availability of cloud software for contractors About $625 million In its initial public offering.
The company, which trades under the stock symbol TTAN, sold its shares at $71 per share on Wednesday, above the expected range. The stock opened at $101. Based on the IPO price, the company's market capitalization was approximately $6.3 billion.
ServiceTitan's IPO is notable because few technology companies have jumped into the public market since late 2021, when rising interest rates and rising inflation prompted investors to exit risky assets. ServiceTitan is the first large venture-backed technology company to go public since then rubric Debuts in April. A month before that, Reddit He started Trading on the New York Stock Exchange.
Other companies have suggested that an IPO may be coming soon. Chip maker Minds It went public in September, but the process was slowed by a review by the Treasury Department's Committee on Foreign Investment in the United States, or CFIUS. Last month, online lender Klarna He said It secretly filed IPO papers with the U.S. Securities and Exchange Commission.
While late-stage startups have been reluctant to make the leap to the public market, investors are showing a growing appetite for the technology.
“The reception is great. The water looks amazing,” Vahi Kozoyan, co-founder and president of ServiceTitan, told CNBC in an interview.
The Nasdaq Composite Index closed above 20,000 points on Wednesday First time. Tesla, alphabet, Amazon and dead All closed in Recordswith Apple reaching below its all-time highs.
ServiceTitan has agreed to terms on Compound Ratchet as part of a 2022 financing round that values the company at $7.6 billion, according to Prospectus. The decision “put ServiceTitan on the clock to go public as quickly as possible to minimize the impact of dilution,” investors at investment firm Meritech Capital wrote in a statement. Blog post.
But Ara Mahdesyan, co-founder and CEO of ServiceTitan, said Thursday that the terms did not influence the decision to go public now.
“Anti-dilution clauses are not uncommon in finance, and I suspect if you did the math yourself and compared it to our growth rate, you would come to a very different conclusion,” he said.
Founded in 2007 and headquartered in Glendale, California, ServiceTitan targets businesses in plumbing, landscaping, electrical and other trades, with software to manage sales leads, record calls, create quotes and schedule jobs. As of Jan. 31, it had about 8,000 customers with annual bills of more than $10,000.
ServiceTitan's preliminary results for the October quarter show a net loss of about $47 million on revenue of $198.5 million. This indicates revenue growth of about 24% year-over-year, the highest rate since mid-2023. But the company's net loss widened from about $40 million in the first quarter of last year.
“I think our reading is definitely that investors really value perpetual growth,” Mahdisian said. “And I think, of course, they appreciate being cash flow positive, which we have been fortunately over the last few quarters.”
Bessemer Venture Partners, TPG and Iconiq Growth are among the company's major shareholders, along with Kozoyan and Mahdisyan.
At its IPO price, ServiceTitan was valued at just over 9 times 12-month revenue. The WisdomTree Cloud Computing Fund, a basket of more than 60 publicly traded cloud stocks, trades at about 6.4 times revenue.
