Freshworks IPO: Targeting $9 Billion Valuation

Freshworks IPO: Targeting Up to $9 Billion Valuation

Freshworks announced on Monday its intention to seek a valuation reaching $9 billion in its upcoming U.S. initial public offering. The company aims to generate over $800 million through this offering.

Based in California but originating in India, Freshworks positions itself as a competitor to Salesforce. The firm intends to offer 28.5 million shares, priced between $28 and $32 each.

Should the shares sell at the upper end of this range, Freshworks could raise $912 million. The company initially submitted IPO documentation in late August, but withheld certain financial details at that time.

Previous Valuation and Funding

The company was most recently valued at $3.5 billion during a funding round in November 2019. Consideration was given to a pre-IPO funding round earlier this year, potentially valuing the company at over $5 billion, but this was ultimately declined.

Investors and Product Portfolio

Accel, Sequoia Capital India, Tiger Global, and CapitalG are among the existing investors in Freshworks. The company develops and provides a diverse suite of business software solutions.

These solutions range from Customer Relationship Management (CRM) systems to help-desk software. In recent years, Freshworks has focused on building an enterprise Software-as-a-Service (SaaS) platform.

This platform provides customers with a comprehensive, integrated set of business tools. The company has also actively expanded its product offerings.

Financial Performance and Market Opportunity

Freshworks has applied to list its shares on the Nasdaq exchange under the ticker symbol FRSH. Currently, the company serves more than 50,000 customers.

Revenue for the first half of the year reached $169 million, a significant increase from $111 million during the same period last year. Net losses decreased from $57 million to $9.8 million year-over-year.

According to the firm’s updated S-1 filing, the total addressable market is estimated at approximately $120 billion, based on research from International Data Corporation (IDC).

Internal data and analysis suggest a potential market opportunity of $77 billion for Freshworks’ products. The company anticipates this market opportunity will grow as customers adopt more products and increase their usage.

Leadership and Venture Capital

Girish Mathrubootham, co-founder and CEO of Freshworks, recently discussed the business with TechCrunch. He is a highly regarded entrepreneur within India’s tech landscape.

Alongside three colleagues, Mathrubootham launched an $85 million venture fund in late July. This fund is designed to support early-stage SaaS startups in India, the world’s second-largest internet market.