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More than 500 of our employees are crorepatis now: Freshworks founder
Photo Credit: 123RF.com

Software-as -a-service startup Freshworks Inc. made its public debut on US-based Nasdaq on Wednesday, after it raised over $1.03 billion as a part of the listing, which valued it at over $10 billion.

The company, which has been listed under the ‘FRSH’ symbol on the Nasdaq Global Select Market exchange, has become the first Indian SaaS company to list on a US exchange. Other Indian companies listed on the US stock exchanges include Infosys, Wipro, WNS, Dr Reddy’s and HDFC Bank.

Freshworks hiked its IPO price at $36 per share this week, from a price range of $32 - $34 per share. In addition, it has granted the underwriters a 30-day option to purchase up to an additional 2,850,000 shares of Class A common stock at the initial public offering price, less underwriting discounts and commissions. 

This could potentially take the total fund raise from Freshworks to $1.13 billion. On Wednesday, the company shares opened on Nasdaq at over $46, about 27% over the listing price.  At 10.10 pm IST, the company's market cap was over $13 billion. 

Freshworks founder Gireesh Mathrubootham told the media on Wednesday night that 76% of the company's employees hold shares. "More than 500 of our employees in India are crorepatis now. At least 70 of those are below 30 years of age, just of college a few years ago."

"This is truly something India needs to do more of. All freshwork employees have actually contributed to that and I truly believe that wealth has to be shared with people who create it. It is not just for the founders to get rich or investors to get rich. I am super happy..."

Morgan Stanley, J.P. Morgan and BofA Securities acted as lead book-running managers, while Jefferies and Barclays acted as book-running managers for the offering.

“Today is the realisation of a major milestone for Freshworks. So I feel like an Indian athlete who has won a gold medal at the Olympics. I’m excited about what’s next for Freshworks and what a global product company from India can achieve [...] Today is day zero for Freshworks and the beginning of so much more,” said Mathrubootham. 

The listing now makes Freshworks the most valuable SaaS startup from India, post-listing, zooming past the likes of application program interface (API) development platform, Postman, which recently was valued at $5.6 billion and mobile application testing platform, BrowserStack valued at $4 billion this year.  

The listing of Freshworks, which was last valued at $3.5 billion in November 2019, heralds a new era for Indian startups which are looking to list in the US exchanges. Payments service provider Pine Labs, e-commerce behemoth, Walmart-owned Flipkart as well as mobile advertising major, InMobi, are some of the names which are looking to make their way to the US-exchanges in the coming months.  

“The way Girish and Shan thoughtfully and deliberately built a winning team over the last decade played a critical role in reaching this exciting milestone [...]  We are fortunate to be partners in this industry-defining company, along with Accel, Tiger Global and CapitalG,” said Sequoia India’s managing director, Mohit Bhatnagar and Sequoia partner Carl Eschenbach, in a blog. 

Freshworks has raised more than $327 million in funding till date from the likes of Accel, CapitalG, Sequoia India, and Tiger Global Management. It has more than 52,500 customers across 120 countries.

The company reported a revenue jump of roughly 45% between calendar year 2019 and 2020. For 2020, the overall revenues for the firm stood at almost $250 million. The company reported an 84% increase in net losses between 2019 and 2020. For Freshworks, the losses for calendar year 2020 stood at $57.3 million.

The company which was co-founded in 2010 in Chennai and later moved its headquarters to San Mateo in the US continues to have a large workforce based in India, and serves over 52,0000 customers all over the world. It currently has close to 4300 employees spread across geographies. 

For the six months ending 30 June, Freshworks’s net losses stood at $9.84 million in 2021, an 83% drop from the $57 million net loss it reported for the same period in 2020. With its market capitalisation of $10 billion, Freshworks is competing with companies such as Salesforce, Zoho, SAP, Zendesk, Microsoft, Oracle and SugarCRM.

The global SaaS market is estimated at about $145.5 billion, according to market research firm Statista. SaaS applications are cloud-based and typically accessible through desktops and mobile applications, as well as with a web interface.

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