ServiceTitan prices at $71, above the expected range

ServiceTitan, a provider of cloud software for contractors, priced its IPO at $71 a share on Wednesday, above the expected range.

The company will debut on Nasdaq on Thursday under the ticker symbol “TTAN.” ServiceTitan previously raised its price to between $65 and $67.

ServiceTitan sold 8.8 million shares in the offering, which would be worth about $625 million. At the IPO price, ServiceTitan is worth about 6.3 billion dollars.

Tech IPOs have been few and far between since late 2021, when inflation and rising interest rates drove investors away from riskier assets. Cloud software stocks quickly fell out of favor after remote work during the pandemic boosted their growth.

In March of this year, communication Reddit went public, followed by a data management company Rubrik the following month. In September, less than two weeks after the Federal Reserve lowered its benchmark rate for the first time since 2020, chipmaker Cerebras filed for an IPO. However, the company has yet to hit the market.

ServiceTitan, based in Glendale, California, went public on Nov. 18. The company said the rest of the proceeds will go toward redeeming all of the outstanding shares of its unconverted preferred stock. It had issued that stock in 2022 to pay off a loan to finance the $577 million acquisition of pest control software provider FieldRoutes.

While raising money in 2022, ServiceTitan agreed to “ratchet up” terms that encourage the company to go public sooner and prevent unnecessary air pollution, according to an analysis by venture capital firm Meritech Capital.

Bessemer Venture Partners, TPG and Iconiq are among the company’s top shareholders, along with founders Vahe Kuzoyan and Ara Mahdessian.

Mahdessian’s father ran a contracting business, and Kuzoyan’s father worked as a plumber, according to the Los Angeles Times. The founders said in a pre-taped presentation of the IPO that they see technology as a way to improve their family businesses. Their software can help with marketing, sales, planning and customer service.

ServiceTitan’s preliminary results for the October quarter show a net loss of $47 million on revenue of $198.5 million. That suggests 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 October quarter last year.

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