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Tall ServiceTitan

ServiceTitan, a software and online platform for plumbers, electricians and HVAC contractors, could be on track to become Southern California’s next billion-dollar tech startup. Founded in Glendale in 2013, the company helps residential contractors automatically manage a range of tasks including booking jobs, dispatching technicians, processing payments and overseeing marketing campaigns. Think Salesforce.com Inc., but for the home services industry. Co-founders Ara Mahdessian and Vahe Kuzoyan originally created the software to help manage their fathers’ residential contracting businesses in Glendale. The two began working with other local businesses and steadily grew the company to the point where it could license the software to nationwide franchises such as Mr. Rooter. It wasn’t long before tech investors took notice. Venture capital firms have invested $161 million in the company, including a Series C round in March led by Boston-based Battery Ventures that raised $62 million. A few months later, TechCrunch reported the company was valued at more than $800 million. ServiceTitan declined to confirm that number, but said it was “in the neighborhood” of its current valuation. ‘Potentially vast’ market The company plans to invest the new capital in expanding its services and building out its cloud-based platform. “Our investors see that the market potential is pretty massive, even though traditionally speaking, home services isn’t the sexiest space in tech,” Kuzoyan told the Business Journal. “They see that there’s an incredibly large number of these types of businesses. It’s a fundamental inelastic need of the market — if your toilet stops working, you’re going to get it fixed.” ServiceTitan isn’t the first enterprise software provider to tap the residential contracting market, which is worth a total of $400 billion, according to home services directory Angie’s List. Services such as Microsoft Corp.’s Access have been around for over a decade, but innovations in cloud and mobile technology have made this kind of software more usable by small businesses. “Now that this software is web-based, it’s cheaper to lease so you don’t have these large up-front installation costs,” said Michael Diamond, a B2B technology analyst with the NPD Group. Sanjiv Kalevar, a vice president at Battery Ventures, is bullish on the prospect of targeting cloud-based technology to residential contractors and other non-office workers. “The market for this type of technology is potentially vast,” Kalevar wrote in a blog post. “Given that today’s publicly traded cloud-software companies have created roughly $200 billion in market value by targeting the 40 percent or so of the population that work in offices, I believe that the opportunity to build software for blue-collar workers is just as large.” Another benefit of utilizing the cloud is that it allows ServiceTitan to integrate outside apps and services into its platform. One of those is GreenSky, a financing app that helps homeowners apply for loans for home improvement projects. With ServiceTitan, contractors can access the Green Sky app on a mobile device and offer customers financing options as they fill out estimates or write contracts. “We’re just getting started in terms of the value we’re able to deliver to everyone in the chain from the businesses that run on ServiceTitan to their consumers,” Kuzoyan said. Smart expansion Going forward, Kuzoyan also sees the proliferation of “smart” home appliances and devices, which are connected to the internet, as a major growth opportunity. By 2020, there will be an estimated 20 billion connected devices worldwide, according to market research firm Gartner Inc. That’s a 78 percent increase from this year. And when those devices break down, ServiceTitan plans to help homeowners find the right technician to fix them. “That interaction between those devices and the trained professional who’s going to come into the home – we see ourselves as being at the intersection of those two things,” said Kuzoyan. The idea is that when a smart fridge stops working or isn’t running efficiently, it will communicate with ServiceTitan to automatically alert the right technician to make a house visit. To realize this goal, the company is beefing up its development team and has finalized partnerships with smart device makers Honeywell International Inc., Lennox International Inc. and Rheem Manufacturing Co. ServiceTitan is far from the only company boasting a cloud-based software aimed at residential contractors. There’s Housecall Pro, Service Fusion and WorkWave Service, to name a few. But ServiceTitan is betting that by offering a more comprehensive end-to-end platform, it can beat out its competitors. The $161 million in VC money doesn’t hurt either. “As far as we’re concerned, this is going to be a winner-take-all market,” said Kuzoyan. “It’s not big enough to support three or four large players, and so our focus and our goal is to make sure that we are that winner-take-all player.”

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