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PitchBook News - ServiceTitan should ratchet up IPOs

Also: EVs power through mobility tech slump, cybersecurity funding is growing again & more
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The Weekend Pitch
December 15, 2024
Presented by Datasite
(Megan Woodard/PitchBook News)
ServiceTitan, which develops software for tradespeople, popped 42% in its IPO debut on Thursday and is now trading at 13x trailing revenue.

It's a remarkable price for a company that didn't have the smoothest road to the Nasdaq floor—and it could be a bellwether for future software IPOs.

"That sound you hear is tech investment bankers everywhere canceling their holiday plans. And breathing a sigh of relief," Will Quist, a partner at early-stage VC Slow Ventures, wrote on X on Thursday.

With a market cap of more than $10 billion, ServiceTitan is not yet profitable: The company recorded a net loss of $183 million for the year ending July 2024.

For over two years, the markets have been cautioning founders to slow down on their growth spending and focus on profitability. ServiceTitan's debut is a golden signal for other founders. And there's plenty of them— there were 114 VC-backed companies in the IPO backlog as of October, according to PitchBook estimates.

I'm Rosie Bradbury, and this is The Weekend Pitch. You can reach me at rosie.bradbury@pitchbook.com or on X @_RosieBradbury.

Can ServiceTitan sustain its price? That's a different question entirely.

"You saw this in '21: Everyone overhypes these IPOs, and it's brutally hard for the company," said Evan Skorpen, portfolio manager of Lead Edge Capital's public markets fund. "The animal spirits are lovely, we're excited about it, but you want rational, even expectations, not these wild swings."
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A message from Datasite  
Private equity’s liquidity strategies — on-demand webinar
The climate is changing — especially with regard to the M&A liquidity landscape. But PE dealmakers have successfully held off a drought by prioritizing quality over quantity. Fund managers have kept liquidity flowing by targeting secondary buyouts, continuation funds, and other shrewd strategies in the face of falling volumes.

Explore the plans they’ve put into play, and how these might pan out, in this on-demand webinar from Datasite and PitchBook. Hear from an expert panel and gain insights for the coming year, including:
  • PE market trends
  • The rise in secondary buyouts
  • The implications of continuation and secondaries fundraising
  • The Datasite view on today’s liquidity landscape
Watch now
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Trivia
In 2024, just nine VC firms took in half of all venture capital raised by US-based funds. Which VC firm took in 11% of all US VC funding, the highest percentage by a single firm this year?

A) General Catalyst
B) Norwest Venture Partners
C) Andreessen Horowitz
D) Thrive Capital

Find your answer at the bottom of The Weekend Pitch!

EVs power through
as mobility tech drops

(Jon Challicom/Getty Images)
VCs largely continue to keep mobility tech at arm's length. Total funding in the sector fell more than 37% quarter-over-quarter in Q3, as fears lingered over the future of the EV subsidy, according to our recent Emerging Tech Research.

The recent collapse of BlackRock-backed Northvolt, a Swedish EV battery specialist, has cast a shadow over an industry already down on its luck. But strong fundraising by EV-enabled companies like Monarch Tractor and Rapido signal a path forward.
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Cybersecurity VC funding
returns to growth
(Kmatta/Getty Images)
Generative AI is lending a boost to information security VC investment, according to our latest Emerging Tech Research.
  • Infosec VC funding is on pace to grow year-over-year, with startups collecting $8.8 billion through Q3.

  • The Morningstar PitchBook Cybersecurity Unicorn Index has outperformed indexes of both global unicorns and AI unicorns since 2021.

  • A loaded IPO pipeline should benefit from Rubrik: The company went public in April, and its stock is up more than 50% over the past month.
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Quote/Unquote
(Raylipscombe/Getty Images/iStockphoto)
"The recovery in [European] deal activity has been fueled in part by a return of US participation. This participation is most noticeable in the UK, which has been ripe for take-privates in the last two years due to structural issues with the London Stock Exchange."

—Nicolas Moura, EMEA private capital research analyst at PitchBook, discussing deals between US-based and European private equity investors. Read more about how US investors are becoming increasingly involved in the UK private markets here.
 

Stay tuned
Keep an eye out for these insights and research reports coming out this week:
  • 2024 US Venture Capital Outlook
  • 2024 US Private Equity Outlook
  • Q3 2024 Pharmatech Report
  • 2024 Supply Chain Tech Overview
  • Q3 2024 Digital Health Report
  • 2024 Healthcare Outlook
  • Analyst Note: Battery Swapping
 

Trivia
Answer: C

Andreessen Horowitz sits at the top of VC funding for 2024, having raised $7.2 billion this past year. General Catalyst came in second, with $6 billion raised. Read about the other VC heavyweights from 2024 here.
 

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This edition of The Weekend Pitch was written by Rosie Bradbury and Nadine Manske. It was edited by James Thorne and Ron Prichard.

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