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Posted by Richy George on 14 November, 2018This post was originally published on this site
ServiceTitan, a startup out of Glendale, CA that has built a software platform for home services businesses — in areas like air conditioning, plumbing and electrical repairs — to manage their work, has raised $165 million in what it claims is the “largest software raise in Southern California history.”
(That distinction might be specifically for B2B software, since Snap, as one example, raised billions before it went public, when it was still known as the app startup Snapchat.)
The company has confirmed that its valuation is now at $1.65 billion — making it the newest unicorn out of the region (and fulfilling a prediction we made earlier this year).
This latest round, a Series D, was led by Index Ventures. New backers Dragoneer and T. Rowe Price also participated, along with existing investors Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.
It’s coming just 7 months after ServiceTitan raised its last round: rapid funding rounds of large sums of money, raised within months of each other, seems to be a trend at the moment, underscoring the current state of the market where VCs have themselves raised huge funds and are looking for safe harbours and fast-growing companies in which to invest them. (As two examples, just earlier today, UiPath announced another huge round, its third fundraising this year; and Nikola Trucking also raised its second round of the year.)
The funding will be used for bringing on more talent — it’s already hired from Google, Netflix, Adobe and Accel — as well as business development and to build more software to fill out a vision of becoming “the operating system for home services.” It’s also been making acquisitions, and this could help with that, too.
This is potentially a huge market, with some $400 billion spent on home service repairs annually in the US alone.
ServiceTitan was co-founded by two Armenian Americans, Ara Mahdessian and Vahe Kuzoyan, in 2012, after they met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California when they were still were in college. The startup was borne out of work both were doing after college to build software to help their fathers, who worked in air conditioning contracting, run their businesses.
Small businesses often are some of the most overlooked when it comes to tech innovations, even more so when they come from relatively unsexy industries like air conditioning repair, but they need solutions as much as larger organizations. ServiceTitan’s rise has come from filling that gap in the market.
It says it is on track to double subscription revenues this year, with some 2,500 customers on board covering some 50,000 technicians and $10 billion of services in areas like plumbing, air conditioning, electrical and garage door repair, working out to nearly 20 percent of homes across the US and Canada.
“The ServiceTitan mission has always been personal to us,” said Ara Mahdessian, co-founder and CEO of ServiceTitan, in a statement. “Our software powers the tireless men and women of home services who ensure the world has the basic necessities of life: running water, relief from the scorching heat and biting cold, power and electricity, and more. We take it for granted today, until our toilets back up, our air conditioning goes out during the heat of summer, or our lights go out in the middle of the night. These are the heroes that come to our rescue, and we’re here to help them be more efficient and successful.”
ServiceTitan is not the only company eyeing up the space, of course: aggregators like Amazon and Angi Homeservices (formerly Angie’s List) are providing a way for independent contractors and small franchises to connect with customers, and they will inevitably also look to provide the accounting and other software to help these companies run their businesses in their two-sided marketplaces.
ServiceTitan believes it has an edge. “Our software helps our customers with nearly every workflow in their business, including CRM, scheduling, dispatch, mobile invoicing, payments, inventory, and more,” said Vahe Kuzoyan, co-founder and President of ServiceTitan, in a statement. “We’re now integrating with large partners to enable the future of home services, including real-time appointment booking integrations with partners like Yelp and others, as well as supply-chain integration with partners like Lennox and others.”
With this round, Index’s Nina Achadjian is joining the board. “Ara and Vahe started ServiceTitan because they wanted to solve the pain point they felt first hand running their fathers’ businesses,” she said. “Since then, the company has revolutionized how plumbers, electricians, air conditioning technicians and thousands of others in other trades run their businesses. The best part is that ServiceTitan is just getting started. We could not be more excited to be a part of their journey to transform the $400 billion home services market.”
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