ServiceTitan Shares surged 42% in their Nasdaq debut on Thursday after the cloud software provider for contractors picked up approximately $625 million in its initial public offering.
The company, which trades under the 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 around $6.3 billion.
ServiceTitan's IPO is unique because very few tech companies have jumped into the public market since late 2021, when rising interest rates and rising inflation drove investors out of risky assets. ServiceTitan is the first venture-backed technology company to go public since then There is Rubrik beginning of April. A month before that, Reddit began buy or sell on the New York Stock Exchange.
Other companies have suggested that an IPO could be coming soon. Shepherd Brains filing to go public in September, but the process has been slowed due to a review by the Treasury Department's Committee on Foreign Investment in the US, or CFIUS. Last month, online lender Klarna said it had secretly filed IPO papers with the US Securities and Exchange Commission.
While late-stage startups have been reluctant to take the public market plunge, investors are showing a growing appetite for the technology.
“The reception is good. The water feels wonderful,” said Vahe Kuzoyan, co-founder and president of ServiceTitan, to CNBC in an interview.
On Wednesday, the Nasdaq Composite index closed above 20,000 for the first time. Tesla, Alphabet, Amazon and Meta all closed at recordswith Apple just below an all-time high.
ServiceTitan agreed to “collect settlement” terms as part of a 2022 financing round that valued the company at $7.6 billion, according to his preview. The decision “has put ServiceTitan on the clock to go public as soon as possible to reduce the impact of dilution,” wrote investors at the venture firm Meritech Capital in a statement. blog post.
But Ara Mahdessian, co-founder and CEO of ServiceTitan, said Thursday that the conditions did not affect the decision to go public now.
“Anti-dilution terms are not uncommon in financing, and I suspect that 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 based in Glendale, California, ServiceTitan targets businesses in plumbing, landscaping, electrical trades and more, with software to manage sales leads, schedule calls, generate quotes and register jobs. As of Jan. 31, it had about 8,000 customers with more than $10,000 in annual bills.
ServiceTitan's preliminary results for the October quarter show a net loss of about $47 million on $198.5 million in revenue. That shows revenue growth of about 24% year over year, the highest since mid-2023. But the company's net loss widened from about $40 million in the October quarter last year.
Bessemer Venture Partners, TPG and Iconiq Growth are among the company's major shareholders, along with Kuzoyan and Mahdessian.
At its IPO price, ServiceTitan was valued at just over 9 times trailing 12 month earnings. The WisdomTree Cloud Computing Fund, a basket of more than 60 publicly traded cloud stocks, currently trades at about 6.4 times earnings.
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