MW ServiceTitan IPO raises price on deal demand and appetite for new issuers

By Steve Gelsi

In a big move, ServiceTitan boosts its estimated price range to $65-$67 a share from $52-$57

A significant price boost for the upcoming initial public offering from ServiceTitan is a sign of demand for the deal and hunger for venture-backed deals, an analyst told MarketWatch on Tuesday.

ServiceTitan, provides a platform for centralizing billing, projects, client communication, and analytics for trades businesses, and is expected to price its IPO on Thursday for trading on Friday on the Nasdaq under the symbol "TTAN."

At the midpoint of its new $65-$67 estimated price range, ServiceTitan's IPO will raise $580.8 million for 8.8 million shares priced at $66 a share, according to a Tuesday filing.

That's a $101.2 million increase in IPo proceeds from the midpoint of its earlier estimated price range of $52 to $57 a share for an IPO of 8.8 million shares.

ServiceTitan's price boost of $11.50 a share to an estimated $66 a share based on the midpoint of the new range is the largest pre-IPO bump-up in some time, said Avery Marquez, assistant portfolio manager of Renaissance Capital, a specialist in pre-IPO research and ETFs focused on IPOs.

"ServiceTitan's range increase is likely a sign of both demand for the deal as well as renewed appetite for new issuers in general," Marquez said in an email to MarketWatch. "In the past few years, less than a dozen larger issuers have raised the range ahead of pricing, and nearly all have outperformed since listing."

ServiceTitan is also a relatively rarity in the new issues market nowadays in that it's backed by venture capital firms including Iconiq Growth, Battery Venture, Bessemer Venture Partners and TPG Tech.

Often these deals are the bread-and-butter of the IPO market as companies go public to allow their backers to cash out all or part of their investments, but this year, only seven venture-backed IPOs have debuted in the face of choppy market conditions.

Despite the low numbers, venture-backed tech IPOs have done "very well" overall, Marquez said. The six that raised $100-plus have averaged a 126% return from offer.

Those results "should encourage more listings from the massive backlog of private unicorns," he said.

"ServiceTitan was born in the trades and built for the trades," says the company's filing documents.

The founders, Ara Mahdessian and Vahe Kuzoyan, the sons of Armenian trades business owners, came up with the idea after watching their parents work late into the night after full days in the field, manually processing invoices and schedules.

"Ara and Vahe founded ServiceTitan to provide tradespeople, like their parents, with technology that is purpose-built to help trades businesses thrive," according to the prospectus.

Also read: ServiceTitan's planned IPO could come with a more than $5 billion valuation

-Steve Gelsi

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December 10, 2024 10:12 ET (15:12 GMT)

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