ServiceTitan's upcoming IPO, expected to reinvigorate the IPO market, is under pressure from a compounding IPO ratchet that could force share dilution if delayed further.
The compounding IPO ratchet means ServiceTitan's minimum valuation threshold increases every quarter, creating urgency to go public before May 2024 to avoid dilution.
If ServiceTitan fails to meet its IPO deadline, it could face substantial dilution of shares due to the compounding nature of the IPO ratchet specified in its 2022 deal.
VCs are optimistic about a potential ServiceTitan IPO, seeing it as a catalyst for the quiet IPO market, but the company faces significant valuation pressures.
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