ServiceTitan Acquires Aspire: Expansion into Landscaping & $9.5B Valuation

Home Improvement Software Leader ServiceTitan Expands with Acquisition and Funding

As more individuals dedicate increased time to their homes, the home improvement sector continues to experience substantial growth. ServiceTitan, a prominent software provider utilized by over 100,000 contractors for operational management, is bolstering its position within this thriving market.

Acquisition of Aspire Software and New Funding Round

The company, which also serves contractors working on commercial properties, has announced the acquisition of Aspire Software, a specialized software solution for commercial landscapers. Simultaneously, ServiceTitan is revealing a new funding round of $200 million, a Series G investment that establishes a company valuation of $9.5 billion.

Investment Details

This funding round is spearheaded by Thoma Bravo, a new investor, with participation from existing investors. These include Sequoia, Tiger Global, Index Ventures, Dragoneer, T. Rowe Price, Battery Ventures, Bessemer Venture Partners, and ICONIQ Capital.

Financial Aspects of the Deal

ServiceTitan, headquartered in Los Angeles, has not disclosed the specific financial details of the acquisition. However, it follows a $500 million funding round completed in March, at which time the company was valued at $8.3 billion – funds specifically allocated for potential acquisitions.

Largest Acquisition to Date

ServiceTitan has confirmed that the Aspire acquisition represents its largest to date, estimated to be valued in the hundreds of millions of dollars. Aspire will maintain its base in Missouri, facilitating further company development from that location.

Aspire Software's Reach and Impact

Aspire currently serves approximately 50,000 users and processes $4 billion in annualized transactions through its platform, encompassing landscaping, snow and ice removal, and construction services. The St. Louis, MO-based company had previously received backing from Mainsail Partners, a growth equity firm.

Industry Consolidation and Growth Potential

This deal highlights the significant scalability and opportunities within the technology sector serving home services. It also suggests a potential trend toward consolidation, where fewer companies develop technology solutions for contractors across various related industries.

ServiceTitan's Financial Performance and Expansion

ServiceTitan currently generates $250 million in annual recurring revenue, a figure reported in March and remaining unchanged. The company experienced 50% growth in the preceding year, driven by increased software usage and expansion of its service offerings.

From Residential to Commercial

Initially focused on residential plumbing, HVAC, and electrical services – areas familiar to founders Ara Mahdessian (CEO) and Vahe Kuzoyan (president) through their family businesses – ServiceTitan has broadened its scope to include garage doors, chimneys, and commercial properties.

Strategic Acquisitions for Specialized Expertise

However, in specialized markets like landscaping or pest control, targeted acquisitions are strategically beneficial. These acquisitions bring in specialized software, teams, and expertise to diversify the company’s portfolio. (The acquisition of ServicePro, a pest control company, occurred in February.)

Market Opportunity and Transaction Volume

ServiceTitan reports that its contractor customers have facilitated over $20 billion in transactions in the past year. Considering the overall contracting repair and maintenance services industry is estimated at $1 trillion, substantial growth potential remains, necessitating expansion of the areas served.

A Shared Vision for Contractors

“Both Aspire and ServiceTitan were founded on a commitment to enhancing the lives of contractors who diligently serve their communities, yet have historically been underserved by technology,” stated Mahdessian. “Mark and his team at Aspire possess over 500 years of collective experience in the commercial landscaping sector. Similar to how we developed ServiceTitan to address the challenges our fathers encountered, it is this direct industry knowledge that has enabled Aspire to create the most robust software in the industry, delivering exceptional customer satisfaction.”

Thoma Bravo's Investment and Potential IPO

Thoma Bravo has recently been actively acquiring majority stakes in established tech companies (including QAD, Proofpoint, and Talend). This investment in ServiceTitan, however, represents a growth investment, prompting speculation about a potential initial public offering (IPO).

IPO Timeline

Mahdessian hinted in March that an IPO could occur later in 2022, contingent on market conditions. This Series G funding round may suggest a shift towards the latter part of that timeframe.

Thoma Bravo's Perspective

“As the fastest-growing software solution for the trades, with an unwavering dedication to customer success, ServiceTitan is well-positioned to extend its leadership and increase its market share as the industry surpasses $1 trillion globally,” said Robert (Tre) Sayle, a partner at Thoma Bravo. “ServiceTitan’s expansion into landscaping, a market exceeding $100 billion in the US alone, is a crucial step in its mission to equip all home and commercial tradespeople with the tools they need to thrive. We are excited to collaborate with ServiceTitan and leverage our software and operational expertise to accelerate its growth and build upon its strong momentum.”

Competitive Landscape in Home Services

Several companies are actively participating in the broader home services market, demonstrating the significant opportunities available. Thumbtack is deepening its involvement in home management, connecting homeowners with contractors and providing them with necessary software. Jobber and BigChange, both recent recipients of funding, are also focused on developing improved software for managing contractors and their fleets.

Future Growth Strategy

ServiceTitan, now the leading software provider in this space, is expected to continue pursuing strategic acquisitions to expand its reach. Additionally, the company will allocate funding to organic growth initiatives, including investments in customer service, research and development, and personnel recruitment.