ServiceTitan, a cloud business software provider, has set the price range for its initial public stock offering between $52 to $57 per share, aiming to raise $446.2 million to $514.2 million. In its latest S-1A SEC form, the company revealed plans to spend a significant portion of the funds, around $311 million, on buying back all shares of its nonconvertible preferred stock at $1,000 per share, along with unpaid dividends to stockholders. Notably, some of the major investors include Saturn FD Holdings, LP, and Coatue Tactical Solutions PS, with ICONIQ Growth, Bessemer Venture Partners, and Battery Ventures also invested in ServiceTitan.

Unlike typical IPO fund allocations, ServiceTitan intends to use the remaining funds as working capital for various corporate uses post-buyback of preferred stock shares. The company had previously agreed to a “compounding IPO ratchet structure” in its Series H round in 2022. Despite concerns over its financial performance, with losses narrowing and reporting $183 million lost from operations in fiscal 2024, ServiceTitan’s IPO pricing range of $52 to $57 has been deemed lower than expected by IPO analyst Alex Clayton. However, Clayton believes the company might price above this range to generate positive headlines and excitement for the offering.

In addition to clarifying eligibility for its direct share program, where 5% of shares will be reserved for founders’ friends and family, as well as key decision-makers of customer companies, ServiceTitan’s IPO outcome remains uncertain. Private stock sales to customers have become more common, with Reddit’s similar approach earlier this year for its moderators. Ultimately, ServiceTitan’s IPO performance may not be indicative of the broader tech IPO landscape.