Startup Freshworks Hits $300 Million in Sales With IPO Looming
(Bloomberg) -- Startup Freshworks Inc. surpassed $300 million in annual subscription revenue, placing the provider of customer-relationship management software on track toward a potential stock-market listing.
The Silicon Valley startup boosted revenue about 40% last year as the pandemic prompted businesses to bolster their digital capabilities, Girish Mathrubootham, its founder and chief executive officer, said in an interview. Customers in health care, education and government contributed to the increase.
Freshworks has kept growing since a 2019 funding round valued it at $3.5 billion. While it has no immediate plans to go public, options down the road include an initial public offering, a deal with a special purpose acquisition company, a direct listing, or raising more capital from private investors, Mathrubootham said.
“We are readying the company for every possible scenario,” he said on a video call. “All options are now on the table.”
During the pandemic, the Salesforce.com Inc. rival hired a chief financial officer, made acquisitions to strengthen its artificial intelligence tools and won new customers including event-tickets provider StubHub. Freshworks has plenty of cash and hasn’t touched the capital from the November 2019 funding round, Mathrubootham said.
Freshworks was founded in India and moved to Silicon Valley to be closer to customers. Now based in San Mateo, the company retains a substantial workforce in the southern Indian city of Chennai.
Businesses still spend more on purchasing legacy software than on software-as-a-service, or SaaS, leaving growth potential for services delivered over the cloud, said Sameer Gandhi, a Silicon Valley-based partner at Accel, Freshworks’ earliest backer.
It’s still “early days of the trend,” he said on the same call. “Cloud has really democratized where companies can originate and how quickly they can become global.”
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