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Alex Clayton
General Partner at Meritech Capital
Alex Clayton is a technology investor at Meritech Capital. He holds a B.A. from Stanford University. Previously, he served as a General Partner at Meritech Capital and held various roles at notable organizations such as ClickUp, xentral ERP Software, Personio, Flock Safety, Extend, tray.io, Braze, Justworks, Outreach, Pendo.io, JFrog, Spark Capital, Redpoint Ventures, and Goldman Sachs in investment and board observer positions.
Highlights
ServiceTitan ($TTAN) updated their S-1/A with a pricing range of $52 -> $57/share. At the midpoint, that represents a ~$5.5B market cap on a fully diluted basis. That is 25% below their last round Series H price of $72.50/share and 54% below the peak ZIRP valuation of $118.96/share ($9.5 billion).
On a multiple-basis, that's ~7.5x current ARR, which is roughly the public software median of 7.2x. While the eventual IPO price and ARR multiple are likely higher (bankers always create a "pop"), this range is below what I would have expected. Investors might not buy the durable growth and margin story given the business is growing ~25% year-over-year and only breakeven with forward projections to be lower. The question is, how do they grow at the same rate but with higher free cash flow margins?
With the compounding ratchet in effect, the company dilutes another ~4% at the midpoint.
Thanks @ausw2000 & @amdecamillo
See an AVP (analysis at various prices) which shows all the share prices below:
Vertical software company @ServiceTitan ($TTAN) filed for an IPO, the 3rd SaaS company of the year. They’re almost $800M in ARR growing 25% year-over-year and should be trading in the next few weeks. $TTAN’s performance should be a barometer for the dozens of other SaaS IPOs thinking about the public markets. More in our post in the link below. Thanks @amdecamillo, @ausw2000 and @danKnightNews1
