Sequoia, CapitalG, Accel drop more cash on Freshworks at $3.5 bn valuation

By Narinder Kapur

  • 14 Nov 2019

Freshworks Inc., a cloud-based software firm that produces a variety of business and customer engagement tools, has raised $150 million (Rs 1,081.22 crore at current exchange rates) in a Series H round led by existing investors.

The round was led by Sequoia Capital, CapitalG (formerly Google Capital) and Accel, which is the company’s first investor, San Mateo, US-headquartered Freshworks said in a statement.

The company said its post-financing valuation following the latest round stands at $3.5 billion. In July last year, the firm entered the unicorn club of startups that are valued at $1 billion or more after raising $100 million (around Rs 685 crore then) in its Series G funding round that included the same three investors. The startup has raised almost $400 million so far, according to Crunchbase data.

With today’s funding announcement, Freshworks reaffirmed that it was on an “IPO track”.

The company said it will use the fresh capital to expand its worldwide presence and increase investments in its integrated software-as-a-service platform. It expects the transaction to close by the end of the year, subject to closing conditions including antitrust regulatory clearance in the US.

The funding announcement comes after reports last month said Freshworks was looking to raise a fresh round of funding at a valuation of up to $3 billion. The reports said that Sequoia and Tiger Global Management would invest.

Freshworks’ suite of business software products includes Freshdesk, customer relationship management software and other new launches including IT support and call centre services.

In November 2016, it raised $55 million in a Series F funding round led by Sequoia Capital India and existing investor Accel. Before that, it had raised $50 million in a Series E funding round led by Tiger Global, with participation from Accel and Google Capital.

The rise and rise of SaaS startups

The SaaS segment across industries has been buzzing with investor activity in recent months. The rapid progress of frontier technologies such as artificial intelligence, natural language processing and branches of machine learning has sprung up a number of startups using the SaaS model.

For example, another SaaS-based startup that recently entered the unicorn club is the enterprise contract lifecycle management company Icertis, which in July raised $115 million (around Rs 791.6 crore) in a Series E funding round from investors such as PremjiInvest and US-based Greycroft Partners.

In September, enterprise human resources management platform Darwinbox raised $15 million in a Series B funding round led by venture capital firm Sequoia India. Similarly, multinational payments technology company Mastercard Inc. invested in digital identity solutions-focused startup Syntizen.

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