Los Angeles The statistical likelihood of growing a tech startup to a billion dollar valuation is infinitesimal, hence the mythical moniker “unicorn” for outfits that pull off the feat.
And those odds apply to startups seeking to disrupt market sectors prized by venture capital firms, such as health care and finance. The odds get longer if – like Glendale-based ServiceTitan Inc. – you have an app for plumbers.
“There are industries like finance and healthcare that suck the air out of the room,” said Vahe Kuzoyan, ServiceTitan’s chief product officer and co-founder. “Making a product for plumbers is probably the least sexy thing you could do.”
ServiceTitan might be an ugly duckling in the tech world, but it recently raised $62 million from Battery Ventures, bringing its funding total to $161 million since Kuzoyan co-founded the company with Chief Executive Ara Mahdessian in 2012.
ServiceTitan sells a cloud-based software service to plumbing, heating and air conditioning and electrical companies to manage workflow, marketing, customer service and billing.
The company has annual revenue in the “tens of millions,” and hopes of passing the $100 million mark this year, according to Kuzoyan, who declined to get more specific even as some observers speculate it could be the next tech outfit with a billion-dollar valuation.
“Traditionally (venture capital) hasn’t been interested in this space,” said William Hsu, managing partner and co-founder of Santa Monica’s Mucker Capital, which was an early ServiceTitan investor. “But ServiceTitan’s software is so much better than the legacy software. They’re charging from four to ten times the price and still winning deals. The market is supportive of a billion dollar company.”
Kuzoyan, 34, and Mahdessian, 32, are both sons of parents who immigrated from Armenia and worked in the home services trades. Both majored in computer science, Kuzoyan at the USC, and Mahdessia at Stanford University. The pair started the company right out of school in an effort to address challenges that confronted their families.
“I saw it first-hand,” Kuzoyan said. “I moved here when I was six with my parents from Armenia and got to see my dad do all sorts of odd-jobs. He worked at a gas station, drove a taxi, and owned a plumbing business.”
ServiceTitan charges more than 2,000 clients a monthly subscription rate that’s based on the number of plumbers at each company. ServiceTitan wouldn’t provide a range of prices but said the cost for its customers comes to an average of about $3 per service call.
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