ServiceTitan begins trading on the Nasdaq after the IPO

ServiceTitan shares rose 42% in their Nasdaq debut on Thursday, after the contractor topped the cloud software provider. About $625 million in the initial public offering.

The company, trading under the ticker symbol TTAN, traded shares at $71 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 notable as few tech companies have made the jump to the public market since late 2021, when rising interest rates and inflation drove investors away from risky assets. ServiceTitan is the first major technology company to go public Rubrik’s debut in April. A month before Reddit it started Trading on the New York Stock Exchange.

Other companies have suggested an IPO could be coming soon. the chip maker the brains it went public in September, but the process was slowed by a review by the Treasury Department’s Committee on Foreign Investment in the US, or CFIUS. Last month, online lender Klarna he said filed IPO proceedings confidentially with the US Securities and Exchange Commission.

While late-stage startups have been reluctant to make the leap to the public market, investors are showing growing interest in the technology. On Wednesday, the Nasdaq Composite index closed above 20,000 for the first time. Tesla, the alphabet, Amazon and Meta everything closed recordsThat Apple is down from an all-time high.

ServiceTitan agreed to “compound ratchet” terms as part of a 2022 financing round that valued the company at $7.6 billion. his prospectus. The decision “positions ServiceTitan to go public early to minimize the impact of dilution,” wrote investors at venture capital firm Meritech Capital. blog post.

Founded in 2007 and based in Glendale, California, ServiceTitan serves plumbing, landscaping, electrical and other trades with software for sales pipeline management, call recording, estimating and job scheduling. As of Jan. 31, it had about 8,000 customers with more than $10,000 in annual billings.

ServiceTitan’s first October quarter results show a net loss of about $47 million on revenue of $198.5 million. This suggests year-over-year revenue growth of roughly 24%, the highest rate 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 founders Vahe Kuzoyan and Ara Mahdessian.

At the IPO price, ServiceTitan was valued at more than 9 times its trailing 12-month earnings. The WisdomTree Cloud Computing Fund, a basket of more than 60 publicly traded cloud stocks, currently trades at 6.4 times trailing earnings.