After selling shares at $71, ServiceTitan's Nasdaq debut sees its stock price rise to $101 in the cloud software vendor's initial public offering.

• On Thursday, ServiceTitan's Nasdaq debut saw their shares surge 42% after raising approximately $625 million in their IPO.
• Since April, Rubrik was the first notable venture-backed IPO.
• In the most recent quarter, ServiceTitan reported a net loss of $47 million despite generating $198.5 million in revenue.

On Thursday, ServiceTitan's Nasdaq debut saw a 42% decline in their stock price after raising approximately $625 million in their IPO.

On Wednesday, the company, trading under the ticker symbol, sold shares at $71 each, above the anticipated range. The stock opened at $101. With its IPO price, the company's market cap was approximately $6.3 billion.

Since late 2021, few tech companies have gone public, as rising interest rates and inflation pushed investors away from risky assets. ServiceTitan is the first significant venture-backed tech company to debut in April, following the public listing of in March.

Cerebras filed to go public in September, but the process was slowed down due to a review by the Treasury Department's Committee on Foreign Investment in the U.S., or CFIUS. Last month, online lender Klarna said that it had confidentially filed IPO paperwork with the SEC.

Despite initial reluctance, late-stage startups are increasingly considering going public as investors show a growing appetite for tech. On Wednesday, the Nasdaq Composite index hit a new record, with all major tech companies closing at all-time highs, including Apple, which was just below its record.

ServiceTitan agreed to "compounding ratchet" terms as part of a 2022 funding round that valued the company at $7.6 billion, according to its prospectus. This decision has put ServiceTitan on the clock to go public ASAP to minimize dilution impact, as investors at venture firm Meritech Capital wrote in a blog post.

ServiceTitan, founded in 2007 and located in Glendale, California, offers software solutions for managing sales leads, recording calls, generating quotes, and scheduling jobs for businesses in plumbing, landscaping, electrical, and other trades. As of January 31, the company had approximately 8,000 customers with over $10,000 in annualized billings.

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.

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

SeviceTitan was valued at just over 9 times trailing 12 months revenue at its IPO price, while the WisdomTree Cloud Computing Fund, comprising more than 60 publicly traded cloud stocks, currently trades at approximately 6.4 times revenue.

Seth Rubin of Stifel predicts that the next few years will be highly active in the IPO and M&A sectors.