With many of us spending more time at home these days, home improvement has continued to be a booming market. Now one of the big players in this space – Service Titan, which creates software that is now used by more than 100,000 entrepreneurs to manage their work, is growing a bit.
The company – which also works with contractors who work on commercial properties – acquires Aspire software, a software provider specifically for commercial landscapers. Along with that, ServiceTitan is announcing additional funding of $ 200 million, a Series G that values this company at $ 9.5 billion.
The funding is led by a new funder, Thoma Bravo, with the participation of other unidentified existing investors. (This list includes Sequoia, Tiger Global, Index Ventures, Dragoneer, T. Rowe Prize, Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.)
Los Angeles-based ServiceTitan is not disclosing the financial terms of the deal, but it comes just after the company raised $ 500 million only in March (when it was valued at $ 8.3 billion dollars) – money she had set aside at the time for acquisitions.
ServiceTitan has also confirmed that this is its biggest acquisition to date, costing around hundreds of millions of dollars. Aspire will remain based in Missouri to develop the business further.
Aspire has some 50,000 users and records $ 4 billion in annualized transactions on its platform in areas such as landscaping, snow and ice management, and construction. He never disclosed an appraisal, or how much money he raised. The St Louis, MO firm was previously backed by private equity firm Mainsail Partners.
The agreement not only underlines the breadth and opportunity that remains for construction technology to serve the home services space, but also what could be a trend of consolidation, where a smaller number of Companies are building technologies for entrepreneurs and others in the space working across a number of adjacent and related verticals.
ServiceTitan already generates annual recurring revenue of $ 250 million – a figure it shared in March and was not updated – and as of that month it had grown 50% from the last year. Part of that growth is simply based on increased use and demand for its software, but part of it is also because the company is expanding what it covers.
ServiceTitan got its start in residential plumbing, HVAC and electrical – the areas where the two founders Ara Mahdessian (CEO) and Vahe Kuzoyan (president) went first because they knew them best from their own businesses. family – but has spread to areas like the garage door, fireplace and other areas, as well as commercial properties, on its own steam.
In other markets like landscaping or pest control, the expertise is more specialized, however, so it makes sense to make acquisitions in these areas to bring this software and teams to manage and build it, in order to further diversify the business. (ServicePro, a pest control company, was acquired in February.)
ServiceTitan said its contractor clients had completed more than $ 20 billion in transactions in the past year, but with the larger contract repair and maintenance industry estimated at $ 1,000 billion, there is obviously a lot more potential. Hence the widening of the range of fields covered by the industry.
“Aspire and ServiceTitan were both born out of a desire to improve the lives of entrepreneurs who work tirelessly to serve their communities, but who have historically been underserved by technology,” Mahdessian said in a statement. “Mark and his team at Aspire have over 500 years of combined experience in the commercial landscaping industry. Just as we built ServiceTitan to solve the problems our fathers faced, it is this first-hand knowledge of the industry that has enabled Aspire to create the most powerful software in the industry with the highest customer satisfaction.
Thoma Bravo has taken prolific steps to take majority positions in a number of older tech companies in recent weeks (see QAD, Proof and Talend for three examples among others). This, however, is a growth investment that is coming, as many wonder when and if ServiceTitan might go public.
I hope to have the opportunity to ask Mahdessian about this later, but in March he hinted that an IPO could take place later this year or at the latest by the end of 2022, depending on the public. market conditions. Perhaps this round of the G series involves a stretch until the latter part of this period.
“As the fastest growing software solution for the trades with a constant focus on customer success, ServiceTitan is poised to expand its leadership and capture increased market share as the industry surpasses 1. Trillion dollars worldwide, ”Robert (Tre) Sayle, partner at Thoma Bravo, said in a statement. “ServiceTitan’s expansion into landscaping, a more than $ 100 billion market in the United States alone, is a significant step on the way to providing all domestic and commercial craftspeople with the tools they need. need to develop and manage a successful business. We are excited to partner with ServiceTitan and leverage our software and operational expertise to accelerate business growth and leverage its strong momentum.
There are a number of companies active in the larger home service market that talk about the opportunities ahead. Companies like Thumbtack are digging deeper into the management of the home, providing a bridge for entrepreneurs to do the necessary work (and also providing them with the software to do it), while companies like Jobber and BigChange, which have also recently lifted, are also researching to create better software to manage individuals and entrepreneur fleets and their fleets.
ServiceTitan, the biggest player in software right now, will likely continue to make more deals to grow its own empire, but added that it will also use the funding to grow more organically, with investments in customer service, R&D and to hire more people at all levels.