ServiceTitan acquires Aspire to move into landscaping, raises $200M at a $9.5B valuation – TechCrunch
With many of us spending more time at home these days, home improvement continues to be a booming market. Now one of the big players in the space – ServiceTitan, which develops software that is used by over 100,000 contractors to manage their work today – is getting a little bigger.
The company, which also works with contractors working on commercial real estate, is acquiring Aspire Software, a software provider specifically for commercial landscapers. In addition, ServiceTitan announces an additional $ 200 million financing, a Series G, valuing this company at $ 9.5 billion.
The funding is being led by a new funder, Thoma Bravo, with participation from other undisclosed existing investors. (This list includes Sequoia, Tiger Global, Dragoneer, T. Rowe Price, Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.)
Los Angeles-based ServiceTitan won’t disclose the financial terms of the deal, but it does follow the company, which only raised $ 500 million in March (when it was valued at $ 8.3 billion) – money it did intended for acquisitions at the time.
ServiceTitan also confirmed that this is the largest acquisition to date, valued at approximately hundreds of millions of dollars. Aspire will remain based in Missouri to expand the company from there.
Aspire itself has approximately 50,000 users and has annualized $ 4 billion in transactions on its platform in areas such as landscaping, snow and ice management, and construction. She never gave a rating or how much money she raised. The St. Louis, MO company was previously supported by growth equity firm Mainsail Partners.
The deal underscores not only how broad the reach and capabilities of building technology will remain to serve the home services space, but also what could be a consolidating trend in it, with a smaller number of companies using technology for contractors and others Work area that spans a number of adjacent and related verticals.
ServiceTitan’s annual recurring revenue is already $ 250 million – a number it shared in March and hasn’t updated – and for that month it was up 50% year over year. Part of that growth is simply based on increased usage and demand for its software, but part of it has also to do with the company expanding its coverage.
ServiceTitan started in the plumbing, HVAC and electrical sectors – the areas in which the two founders Ara Mahdessian (CEO) and Vahe Kuzoyan (President) took the first steps because they knew them best from their own family businesses – but expanded into areas such as garage doors, chimneys and other areas as well as commercial real estate from their own resources.
However, in other markets such as landscaping or pest control, the expertise is more specialized, so it makes sense to make acquisitions in these areas to take over these software and teams to manage and build them to further diversify the company. (ServicePro, a pest control company, was acquired in February.)
ServiceTitan said its contract customers had more than $ 20 billion in transactions last year, but with the broader contract repair and maintenance services industry valued at $ 1 trillion, there is obviously a lot going on more potential. This expands the range of areas covered in the industry.
“Both Aspire and ServiceTitan were born out of a desire to improve the lives of contractors who work tirelessly to serve their communities but who have historically been underserved by technology,” Mahdessian said in a statement. “Together at Aspire, Mark and his team have over 500 years of commercial landscaping experience. Just as we developed ServiceTitan to solve our fathers’ problems, it is this firsthand industry knowledge that has enabled Aspire to create the best performing software in the industry with the highest levels of customer satisfaction. ”
Thoma Bravo has taken some successful steps in the past few weeks to take on majority positions in a number of older technology companies (see QAD, Proofpoint, and Talend, among others). However, this is a growth investment that many are wondering when and if ServiceTitan could go public.
Hopefully I’ll ask Mahdessian about this later, but in March he hinted that an IPO could happen later this year or late 2022 at the latest, depending on market conditions. This Series G round implies that it may extend to the later part of this timeframe.
“As the fastest growing craft software solution with a relentless focus on customer success, ServiceTitan is poised to build leadership and gain greater market share as the industry tops $ 1 trillion globally,” said Robert (Tre) Sayle, partner at Thoma Bravo, in a statement. “ServiceTitan’s expansion into landscaping, a market of more than $ 100 billion in the US alone, is an important step in providing all home and commercial professionals with the tools they need to grow and need to run a successful business. We are excited to partner with ServiceTitan and leverage our software and operations expertise to accelerate the company’s growth and build on its strong momentum. “
There are a number of companies operating in the broader home services market that illustrate the opportunities that lie ahead. Companies like Thumbtack dig deeper into home management, providing contractors with a bridge to get the work done (and also provide them with the software to do it), while companies like Jobber and BigChange, which have also recently risen, do too are looking to develop better software to manage individuals and fleets of contractors and their fleets.
ServiceTitan, currently the largest software company, is likely to continue to do more business to grow its own empire, but it added that it will also use the funding to expand more organically, with investments in customer service, research and development, and places Invite more people across the board.