Freshworks Inc., an Indian tech startup, increased 32 per cent after raising $1 billion in an initial public offering priced above a marketed range on September 22, BloombergQuint reported.
At $47.55, the software company closed its share in New York trading, taking it to a market value of $13 billion. Freshworks would have a fully diluted value of over $14 billion, accounting for employee stock options and restricted stock units.
In 2020, the company successfully boosted the revenue by about 40 per cent after the Covid-19 pandemic forced businesses to go digital, and sales continued to grow in the first six months of this year while its net loss slipped.
Currently, with 52,500 promising customers, the company witnessed its revenue growth in the first half of 2021 to $169 million, up from $11 million in the first six months of 2020. Freshworks net loss shrank to $9.8 million from $57 million a year ago, indicated its filings.
Freshworks’s potential competitor Salesforce.com Inc. was valued at $3.5 billion in a 2019 funding round. The software company sold 28.5 million shares on September 21 for $36 each after marketing them for between $32 and $34. This is the target the company was boosted from $28 to $32.
Founded by Girish Mathrubootham and Shan Krishnasamy in 2010 in India, Freshworks moved to Silicon Valley to serve better to its customers. The company, now based in San Mateo, California, retains a significant workforce in the Southern Indian city of Chennai. One of the founders, Girish Mathrubootham, likened Freshworks software to the iPhone in its filings with the U.S. Securities and Exchange Commission, stating businesses shouldn’t rely on several tools to engage with customers.
According to Mathrubootham, he wanted to reach $1 million in revenue when he started the company. He said that was until Shekhar Kirani of Accel put the idea of a U.S. IPO in his head.
Freshworks is affiliated with Accel India and others of Tiger Global Management that control over a quarter of the company’s Class B shares.
“You can sell Freshworks and make a lot of money, or you can be the first Indian company in SaaS to go public in the U.S., and it would be a historic milestone,” Mathrubootham was quoted as saying by BloombergQuint. “And from that point on that was when the dream towards today started.”
He further shared that he considers Marc Benioff of Salesforce.com an amazing leader, and he “would love to continue putting efforts to take Freshworks to greater heights.”
Morgan Stanley, JPMorgan Chase & Co. and Bank of America Corp helped lead the IPO of Freshworks. Its shares are trading on the Nasdaq Global Select Market under the symbol FRSH.
