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The city of Glendale, Calif. seems like an unlikely place to grow one of the next billion-dollar startups in the booming Los Angeles tech ecosystem.
Located at the southeastern tip of the San Fernando Valley, the Los Angeles suburb counts its biggest employers as the adhesive manufacturer Avery Dennison; the Los Angeles industrial team for the real estate developer CBRE; the International House of Pancakes; Disney Consumer Products; DreamWorks Studios; Walt Disney Animation and Univision. “Silicon Beach” this ain’t.
But it’s here in the (other) Valley’s southernmost edge that investors have found a startup they consider to be the next potential billion-dollar “unicorn” that will come out of Los Angeles. The company is ServiceTitan, and its market… is air conditioners.
More specifically, it’s the contractors that service equipment like the heating, ventilation and cooling systems at commercial and residential properties across the U.S.
Founded by Ara Mahdessian and Vahe Kuzoyan in 2012, ServiceTitan is very much an up-and-coming billion-dollar business that’s a family (minded) affair.
Mahdessian and Kuzoyan met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California back when both men were in college.
Both programmers, the two reconnected after doing stints as custom developers during and after college, and then when they were developing tools for their families’ businesses as residential contractors in the Los Angeles suburb of Glendale.
The two men built a suite of services to help contractors like their fathers manage their businesses. Now following a $62 million round of funding led by Battery Ventures last month, the company is worth roughly $800 million, according to people with knowledge of the investment, and is on its way to becoming Los Angeles’ next billion-dollar business.
Battery isn’t the only marquee investor to find value in ServiceTitan’s business developing software managing day labor.
Iconiq Capital, the investment firm managing the wealth of some of Silicon Valley’s most successful executives (the firm counts Facebook chief executive Mark Zuckerberg, and senior staff like Dustin Moskovitz and Sheryl Sandberg; Twitter chief Jack Dorsey; and LinkedIn founder and chief executive Reid Hoffman among its clients, according to a 2014 Forbes article), has also taken a shine to the now-gargantuan startup from Glendale.
It was Iconiq that put a whopping $80 million into ServiceTitan just last year — and while the 2017 cash infusion may have been larger, the company’s valuation has continued to rise.
That’s likely due to a continually expanding toolkit that now boasts a customer relationship management system, efficient dispatching and routing, invoice management, mobile applications for field professionals and marketing analytics and reporting tools.
“ServiceTitan’s incredibly fast growth is a testament to the brisk demand for new mobile and cloud-based technology that is purpose-built for the tradesmen and women in our workforce,” said Battery Ventures general partner Michael Brown — who’s taking a seat on the ServiceTitan board.
What distinguishes the ServiceTitan business from other point solutions is that they’ve taken to targeting not mom-and-pop small businesses but franchises like Mr. Rooter and George Brazil. Gold Medal Service, John Moore Services, Hiller Plumbing, Casteel Air, Baker Brothers Plumbing and Air Conditioning and Bonney may not be household names, but they’re large providers of contractors who work under those brands.
The company counts 400 employees on staff, and will look to use the money to continue to grow out its suite of products and services, according to a March statement announcing the funding.
And as Battery Ventures investor Sanjiv Kalevar noted in a blog post last year, the opportunity for software companies serving blue-collar workers is huge.
For people sitting at our desks and working behind laptops on programs like Microsoft Office, it can be easy to overlook the large, sometimes forgotten, workforce out there in construction, manufacturing, transportation, hospitality, retail and many other multi-billion dollar industries. Indeed, more than 60% of U.S. workers and even more globally fall into these “blue collar” industries.
By and large, these workers have not benefitted much from recent technology improvements available to office-based workers—think new email and workplace-collaboration technologies, or advanced sales and HR systems. Never mind the long-term opportunities for companies in these sectors from technologies like artificial intelligence, drones, and virtual or augmented reality; hourly and field workers are dealing with much more basic on-the-job challenges, like finding work, getting their jobs done on time and getting paid. These more basic needs can be solved with seemingly simple technologies—software for billing, scheduling, navigation and many other business workflows. These kinds of technologies, unlike AI, don’t automate away workers. Instead, they empower them to be more efficient and productive.
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Hewlett Packard Enterprise is moving north from Palo Alto to San Jose. The company will relocate 1,000 employees to a 220,000-square-foot space in late 2018. HPE was spun-off from Hewlett-Packard in 2015 and is focused on servers and storage.
This news comes months after HPE announced a different plan in which the company was moving to Santa Clara, where Aruba Networks, a company it previously acquired, is headquartered.
HPE is going to occupy six floors in San Jose’s America Center, which is located near a forthcoming Berryessa BART station.
This move is the latest win for San Jose. Google recently announced it would move in the coming years. According to a report in The Mercury News, the city of San Jose did not offer HPE any financial incentives.
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Self-driving technology company Aurora has made some key moves on its leadership team and overall company growth: It’s bringing on SpaceX’s now former head of software engineering, Jinnah Hosein, to lead its own software engineering team in a VP role. The autonomous software provider is also opening up two new offices, including one in San Francisco, and another in Pittsburgh, in addition to its existing HQ in Palo Alto.
Bringing on Hosein is a huge move for Aurora, which will now have some additional senior leadership taken to help direct and organize its growing engineering team, according to Aurora co-founder Chris Urmson . Hosein’s background includes his time as VP of Software Engineering at SpaceX, where he spent the past four years and oversaw projects including the recent successful Falcon Heavy launch. Before that, he was Director of Software Engineering at Google working on Google Cloud, site reliability and other software projects.
“It’s a pretty incredible set of experiences he has,” Urmson said. “We’re just excited about him bringing that leadership capability, that experience in building both cloud and incredibly reliable software to our team and working with the rest of the folks here.”
Hosein also worked for a brief time overseeing Tesla’s software operations as well as SpaceX’s when he served as acting VP of Tesla’s Autopilot Software prior to Tesla hiring Apple’s Chris Lattner for the role. Urmson says that Hosein’s proven track record launching rockets, and organizing software projects on that level of complexity is more important to Aurora than any brief time he may have spent on Autopilot, however.
Aurora is also opening two new physical offices and testing locations, as mentioned, including the San Francisco one that Urmson says will be a welcome relief to some of their employees currently commuting south to Palo Alto, as well as a way to attract more talent looking to work in the city proper. The Pittsburgh office gives them a new testbed, where they can prove their tech in inclement driving conditions and adverse winter weather, and it also puts them in close proximity to Carnegie Mellon and Pittsburgh’s robotics talent pool.
“When you combine that, between the offices we have in the South Bay, the San Francisco test areas that we’ll now have more access to and the Pittsburgh test areas, we have a pretty exciting diversity of test environments and places to operate,” Urmson added.
Aurora has already announced partnerships with Volkswagen, Hyundai, Byton and more, and recently added LinkedIn founder Reid Hoffman and Index Ventures’ Mike Volpi to its board.
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Yesterday Alchemist Accelerator, best known for working with enterprise startups, held its 17th demo day at the Stanford Research Institute (SRI) in Menlo Park, California. Twenty-four startups pitched ideas ranging from personalized genomics to hard tech spinouts from Stanford’s Linear Accelerator. Rather than expound upon all twenty-four I worked with Alchemist to bring you a top… Read More
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Snap Inc. has laid off at least two dozen people across several divisions within the company, according to The Information, which first reported the news. Snap has since confirmed these layoffs, which largely affect those on the content teams in the New York and London offices. Read More
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As a fan of wine and guides, WineryGuide got my attention. Created by Aga and Mariusz Andryszewski, the service offers detailed guides to wineries in Napa Valley in a compact and smart way. “The WineryGuide app puts all of the expertise of a professional wine concierge or tour guide with years of experience in Napa Valley at users’ fingertips. We use latest technology to answer… Read More
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41 startups graced the stage at 500 Startups’ 20th demo day at the Parc55 hotel in downtown San Francisco. The event came complete with mascots, a summer of love theme and a diverse array of early-stage companies.
This time around, 500 focused in heavily on health startups. A number of the founders demoing presented businesses in the interest of the public good —… Read More
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Snap’s camera company ambitions included exploring drones as a possible product line, according to a new report from the New York Times. The drone plans would’ve given users the potential to take photos and videos from an eagle-eye perspective to share on Snapchat, its social network, and would’ve offered another hardware option alongside Spectacles as a way to help users… Read More
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Nationally, bars today lose billions of dollars from improperly managed alcohol inventory. These losses add up quickly as a result of oversized pours, spills and even theft. Nectar, a stealth connected-device startup operating out of a Palo Alto dentist’s office (of all places), just locked down a $4.55 million seed funding round from the likes of Joe Lonsdale (8VC + Palantir), Lior… Read More
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