Software company Freshworks has filed for an initial public offering in the United States. The company is looking to raise $100 million, a placeholder amount which could very well change going forward, its filings with the US Securities and Exchange Commission showed.
The company, founded in 2010 by Girish Mathrubootham and Shan Krishnasamy, said it plans to use proceeds from the initial public offering for general corporate purposes, such as operating expenses, working capital, and capital expenditures.
Freshworks may also use a portion of the proceeds to acquire complementary businesses, products, services, or technologies, it said in its SEC filings.
The company’s IPO is being led by Morgan Stanley, JP Morgan Chase and Bank of America. It is looking to list its shares in the Nasdaq Global Select Market.
Freshworks was last valued at $3.5 billion following a fundraise in 2019 and according to a Reuters report, is eyeing a valuation of $10 billion following the IPO. The company is backed by the likes of Accel, Sequoia Capital and Tiger Global. That valuation will take it to the top of the pile of SaaS startups from India, ahead of Postman which was valued at $5.6 billion in its last round, and Browserstack at $4 billion. As India’s first SaaS unicorn, the move to be the first to list, and that too overseas, is not so unexpected in that context.
In its filings, the SaaS startup said that its revenue in the last twelve months was $308 million. More importantly, its net loss reduced to $9.8 million from $57 million a year ago. The company claimed to have more than 52,500 customers worldwide.
According to filings, Tiger Global PIP VI Holdings and Accel India III (Mauritius) own 26.24% and 25.79% respectively. Sequoia Capital Global Growth Fund III has a 12.26% stake in Freshworks whereas the company’s co-founder and CEO hold 7.08%. Google owns 8.31% stake in it. The remaining 20% is owned by other stakeholders including its second co-founder Krishnasamy.
Importantly, Freshworks’ filing also revealed that it was currently locked in a legal battle with software company Zoho.
“On March 17, 2020, Zoho Corporation Pvt. Ltd. filed a lawsuit against us in the United States Court for the Northern District of California, alleging improper access of Zoho’s internal customer relationship management database,” Freshworks said in its IPO document.
“The complaint, as amended, seeks injunctive relief, damages of an unspecified amount with interest, and attorneys’ fees and costs. We reject the claims raised by Zoho and intend to vigorously defend the claims made against us.” it added.
Freshworks has several big-ticket competitors globally including the likes of Salesforce and Palantir.