The customer and employee engagement software provider Freshworks has reportedly hired banks in preparation for an initial public offering in the United States, with Morgan Stanley serving as lead.
According to Reuters, the San Mateo, California-based company is eyeing a Nasdaq stock market debut that could see the company valued at around $10bn – with the move expected to happen in the coming months.
Freshworks provides a software as a service suite, with its flagship customer experience product being customer service platform Freshdesk (which the company was previously named after), as well as a chatbot offering named Freshchat and cloud phone system known as Freshcaller.
A Startup Success Story
Since being founded in 2010 in Chennai, India, Freshworks has attracted nearly $500mn of funding across nine funding rounds – with its Series H in November 2019 alone bringing in $150mn. That round was jointly led by Sequoia Capital, CapitalG and Accel and valued the company at $3.5bn.
At the time, Mohit Bhatnagar, Managing Director, Sequoia Capital India, said: “The CRM landscape is littered with solutions that are high on hype and low on results. Freshworks is unique in delivering software that works for end users across the organisation, whether in marketing, sales, support or customer success. There’s a reason Sequoia’s teams across India and the US have each independently decided to double down on Freshworks as it expands its footprint from India to global markets. The opportunity has never been greater to align an entire organisation and create a unified customer experience that better understands and meets their ever-changing needs.”
Growing Subscription Revenue
The news comes on the back of an announcement in February that it generated over $300mn of subscription revenue in 2020, representing a year-over-year growth rate of 40% and setting a new record for the company.
“Like everyone, our 2020 plan went out the window when the pandemic hit, but our hard-working team persevered,” said Girish Mathrubootham, Freshworks founder and CEO. “Our mission is to create customers for life and during this past year, this goal was put to the test. Our team rose to the challenge and rallied around our customers to help them navigate unknown waters and empower their employees to respond to increasing customer demands.”
2020 also saw the company debut new products including a CRM solution and acquire AI provider AnsweriQ and cloud management platform Flint.
“Freshworks‘ impressive growth is not only a testament to the company’s creativity and can-do culture, but also reflects how businesses are looking for new and innovative ways to connect with their customers,” said Sameer Gandhi, partner at Accel. “Freshworks delivers powerful, easy-to-use cloud-based solutions packaged in a flexible and affordable way, which is even more relevant in 2021 and beyond. As Freshworks’ first investor, we admire their achievements not only for the past year but throughout their impressive 10-year history, during which they have consistently delivered tremendous value to their customers through an increasing array of inventive products. We know even more history is yet to be written as they continue to fulfil their customer-for-life mission.”
