In one of 2024’s few tech IPOs, ServiceTitan’s shares jumped nearly 40% as it began trading.
The company’s stock, initially priced at $71, opened at $101, placing ServiceTitan’s valuation at nearly $9 billion. Its shares closed at $100.90.
ServiceTitan is a cloud-based platform that helps contractors manage their operations and communicate with customers. The company’s founders Ara Mahdessian and Vahe Kuzoyan spoke to Fortune on Thursday morning.
"There are two important things that matter,” said Mahdessian. “One was the strength and durability of our business… Then, the second was favorable market conditions, and this was a great time for us to become a public company."
As Mahdessian and Kuzoyan look to the next year, though their industry isn’t immune to cycles, they find it’s less cyclical than other industries, like construction.
“The need that it serves is such a fundamental human need that it doesn't matter what the macro condition is,” said Kuzoyan. “If your toilet is broken, you're going to get it fixed. If your air conditioning is broken, you're going to get that fixed.”
ServiceTitan’s investors include Tiger Global Management, Sequoia Capital, Bessemer Venture Partners, TPG, Iconiq Growth, Battery Ventures, Dragoneer Investment Group, and Index Ventures. The company was last valued at $7.6 billion in a 2022 funding round.
“Back in 2016, I nearly had to pretend to be an electrician just to meet with Ara and Vahe because they were that focused on their customers,” Will Griffith, general partner at Iconiq Growth, which led ServiceTitan’s Series B in 2016 and has become the company’s largest backer in terms of dollars invested and the size of its stake, said in an email.
In its original IPO filing, for the quarter ending July 31, ServiceTitan saw a $35.7 million net loss, with $193 million in revenue, up more than 23% year-over-year.
ServiceTitan’s IPO came amid broader pressure in the IPO market, which has been in a long drought broken up only by incredibly occasional drops of go-public rain. (The spring IPO of cybersecurity company Rubrik was a rare example of a successful debut this year.) There’s the sense that success for ServiceTitan could mean success for many others in the pipeline, such as fintech companies Plaid and Chime. In fintech especially, exits have been tough to come by in recent years, said Rudy Yang, PitchBook senior emerging technology analyst.
“We expect ServiceTitan’s debut to be an encouraging indicator that could inspire other fintech players in the extensive fintech IPO pipeline to follow suit,” Yang said in an email to Fortune.
It’s a sentiment that early ServiceTitan investor and Index Ventures partner Nina Achadjian (who first met Mahdessian in college) shares.
“ServiceTitan’s listing is a testament to the unrealized value waiting in the public markets for the right companies,” Achadjian told Fortune over text. “This will further widen the door for tech IPOs and M&As in 2025, particularly for exceptional companies looking for clarity and confidence on the metrics that matter to public market investors.”
