What happened: The US vertical SaaS provider ServiceTitan has filed for an IPO and is expected to go public soon (SEC). The company offers a cloud-based platform for trade industries and covers all of their workflows end-to-end. A plumber can use ServiceTitan as its only software solution, which covers anything from the usual CRM features to marketing, scheduling of a technician, and, of course, fintech products such as payment and financing.
My comment: ServiceTitan has the potential to become the new poster child for embedded finance. Companies like Shopify or Toast are still way ahead, but a successful IPO from ServiceTitan could prove that embedded finance is not limited to a few specific industries. To narrow down on their fintech offering, ServiceTitan’s core fintech feature is, of course, payments acceptance: the plumber business can accept payments from customers online or offline, and the data is directly available in the software for further business activities. Additionally, ServiceTitan offers a financing product for their customer’s customer. For example, when the plumber informs their customer that just changing the toilet won’t help and bigger changes are necessary, the plumber can actively suggest financing products to pay for the bill. According to ServiceTitan, those businesses that offer financing products see a 12% higher close rate and a 13% higher ticket size.
The magic of embedded finance is not just in the pure numbers. As you can see in the image above, which is part of the official S-1 filing, the usage of fintech products is part of ServiceTitan’s flywheel. Both the payment and consumer financing features increase revenue directly but also improve the customer experience and value generated.
Currently, ServiceTitan is only operating in the US and Canada. We are seeing a few local competitors in Europe already, but would ServiceTitan also have a chance in the European market?
