ServiceTitan debuts with 42% surge in IPO

ServiceTitan Inc., a provider of residential and commercial repair software, experienced a significant surge in its stock value during its initial public offering (IPO), opening at $101 per share, which is a 42% increase over its offering price of $71. This marks the most substantial opening jump for a U.S. IPO that raised over $400 million since Astera Labs Inc.'s debut in March.

The Glendale, California-based company successfully raised $624.8 million through the IPO, which now values ServiceTitan at approximately $9 billion on the market. When considering stock options and restricted share units, the valuation extends to about $10 billion. This valuation represents a notable 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.

ServiceTitan, which had initially set a share price range of $65 to $67, later increased the range, reflecting investor confidence in the company's growth prospects, large market potential, and comprehensive software offerings. The company's platform is designed to streamline a variety of tasks for service businesses, including scheduling, dispatching, and financing, with the objective of enhancing the efficiency of construction projects and service visits.

The company's co-founders, CEO Ara Mahdessian and President Vahe Kuzoyan, are poised to maintain the majority of voting power post-IPO through their Class B shares. Major stakeholders in the company following the offering include affiliates of ICONIQ Growth with a 20.5% ownership of Class A shares, Bessemer Venture Partners with 11.9%, TPG Inc. entities with 7.2%, and Battery Ventures affiliates holding 6.4%.

ServiceTitan's financial performance demonstrates growth, with the company reporting annual revenue of around $614 million for fiscal 2024, a 31% increase year-over-year. Despite this growth, the company incurred a net loss of approximately $195 million, which is an improvement over the $270 million loss reported in fiscal 2023.

The IPO was led by a consortium of financial institutions including Goldman Sachs Group Inc (NYSE:GS )., Morgan Stanley (NYSE:MS ), Wells Fargo (NYSE:WFC ) & Co., and Citigroup Inc (NYSE:C )., along with 10 other banks. ServiceTitan's shares are now publicly traded on the NASDAQ Global Select Market under the ticker symbol TTAN.

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Source: Investing.com