After a slow stretch for tech offerings, ServiceTitan prices its IPO at $71, above the expected range.

• On Wednesday, ServiceTitan announced the pricing of 8.8 million shares at $71 each in its initial public offering.
• In recent years, there have been few tech IPOs, and investors are searching for indications of activity as they approach 2025.
• Previously, ServiceTitan agreed to terms that urged it to go public promptly and avoid dilution.

On Wednesday, ServiceTitan, a cloud software provider to contractors, set its IPO price at $71 per share, higher than the anticipated range.

ServiceTitan will debut on the Nasdaq on Thursday with the ticker symbol "TTAN." The company had previously raised its price range to between $65 and $67.

At the IPO price, ServiceTitan is valued at approximately $6.3 billion after selling 8.8 million shares in the offering, resulting in a raise of nearly $625 million.

Since late 2021, there have been few technology IPOs due to inflation and rising interest rates causing investors to avoid riskier assets. The growth of cloud software stocks, which had been accelerated by remote work during the pandemic, quickly lost favor.

In March, social network went public, followed by data management company in April. 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 debut on the market.

Glendale, California-based ServiceTitan filed for an initial public offering on November 18. The company stated that some of the proceeds from the offering would be used to redeem all outstanding shares of its non-convertible preferred stock. In 2022, the company issued this stock to repay loans used to finance the $577 million acquisition of pest control software provider FieldRoutes.

In 2022, ServiceTitan agreed to "compounding ratchet" terms that prompted the company to quickly go public and prevent dilution, as per an analysis from venture firm Meritech Capital.

The company's top shareholders include Bessemer Venture Partners, TPG, Iconiq, founders Vahe Kuzoyan and Ara Mahdessian.

According to the Los Angeles Times, Mahdessian's father had a contracting business, while Kuzoyan's father dealt in plumbing. The founders of the company saw technology as a way to modernize their family businesses and their software can help with marketing, sales, scheduling, and customer service.

ServiceTitan's preliminary results for the October quarter reveal a net loss of approximately $47 million on $198.5 million in revenue. This indicates a 24% year-over-year revenue growth, the highest rate since mid-2023. However, the company's net loss has increased from around $40 million in the October quarter of the previous year.

Mitchell Green states that many tech companies have successfully completed IPOs while remaining private businesses.