Freshworks becomes first Indian SaaS startup to list in US after $1 Bn IPO

Freshworks on Wednesday became the first Indian-origin software startup to list on the Nasdaq stock exchange following a billion-dollar initial public offering. The company raised over $1.03 billion in its IPO.

The company had hiked the price of its individual shares to $36 per share from  $32-34 per share a few days ago and $28-32 per share till last week owing to a strong investor interest. At the current list price, the company has attained a market cap of well over $10 billion as opposed to the $9 billion valuation it was seeking earlier. 

In its regulatory filings with the US Securities and Exchange Commission earlier this month, Freshworks had said it has a large addressable market of approximately $120 billion. And, the company estimates the annual potential market opportunity for its products to be $77 billion. 

“According to IDC, by 2025, the markets we address within CRM will represent a $76 billion opportunity and the SSM market will represent a $44 billion opportunity,” Freshworks said in its offer documents. 

A $10 billion valuation takes Freshworks 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.

The successful listing also means a heyday for some of the early backers of Freshworks. For instance, Accel, which participated in the company’s Series A round back in 2011 had picked up a stake in the company at $0.05 per share. Similarly. Tiger Global, which had backed the company in its Series B round a year later, had acquired stakes at $0.14 per share. 

According to Freshworks' filings, Tiger Global PIP VI Holdings and Accel India III (Mauritius) own 26.24% and 25.79% of the company, respectively. Sequoia Capital Global Growth Fund III has a 12.26% stake in Freshworks whereas the company’s co-founder and CEO Girish Mathrubootham holds 7.08%. 

Google owns 8.31% stake in it. The remaining 20% is owned by other stakeholders including its second co-founder Shan Krishnasamy.

Freshworks’ 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.