Freshworks Success Story - The Journey from a Small Startup to Nasdaq

Anik Banerjee Anik Banerjee Purbalee Dutta Purbalee Dutta
May 30, 2022 15 min read
Freshworks Success Story - The Journey from a Small Startup to Nasdaq

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Freshworks.

Let's be honest about the fact that a majority of the employees despise the software application they use at work. Business software has always been noted as cumbersome, costly, difficult to implement, and challenging to use.

Days are usually spent attempting to tailor a difficult software to use for a specific purpose as decided by the company. Sometimes it becomes so difficult that the companies need to recruit full-time staff to oversee the application, which is simply another hit to their finances. All of these can now be avoided with the emergence of Freshworks, which is a one-stop cloud-based software solution for businesses.

Freshworks was founded in 2010 by Girish Mathrubootham, Shan Krishnasamy and Vijay Shankar in Chennai. Freshworks agrees that every company needs better technology that is ready to use, easy to scale, affordable, and leaves a little room for configuration. All of the company's products deliver on this pledge and are backed by world-class customer service. The best thing is that getting them to work is not very expensive.

Know more about Freshworks success story, its Founders, Business Model, Team, Logo, Startup story, Challenges, Competitors, Mission and Vision, Funding, Future Plans and more in this article.

Freshworks - Company Highlights

Startup Name Freshworks
Former Name Freshdesk
Headquarters San Mateo, California, United States
Industry Information Services, Software, Saas
Founder Girish Mathrubootham, Shan Krishnasamy, Vijay Shankar
Founded October 2010
Funding $484 mn (May 2022)
Revenue $114.6 mn (Q1 FY2022)
Valuation $4.57 bn (May 2022)
Current CEO Girish Mathrubootham
Website www.freshworks.com

About Freshworks
Freshworks - Startup Story
Freshworks - Founders And Team
Freshworks - Name, Logo and Tagline
Freshworks - Vision and Mission
Freshworks - Business Model
Freshworks - Revenue and Growth
Freshworks - Funding And Investors
Freshworks - IPO
Freshworks - ESOPs
Freshworks - Investments
Freshworks - Acquisitions
Freshworks - Awards and Recognition
Freshworks - Competitors
Freshworks - Challenges Faced
Freshworks - Future Plans

About Freshworks

Freshworks is a global Saas-based software solutions provider that helps enable businesses to get the best out of their software. Originally headquartered in Chennai, India, Freshworks is currently listed on Nasdaq with its headquarters in San Mateo, California, United States.

Founded by Girish Mathrubootham and Shan Krishnasamy in 2010 in Chennai, the company brings in a range of product suites, including sales CRM software, recruitment tools, and customer-support helpdesk software to exceed customer and employee expectations.

With a focus on enabling all kinds of big and small companies and their increasing requirements, Freshworks builds and distributes easy-to-use SaaS software, and helps all of its customers drive clear business results. Freshdesk, Freshworks, Freshservice, Freshteam, Freshchat, Freshcaller, and other products are among the company's offerings.

The company already boasts of enabling over 50,000 big and small companies across the globe.

Freshworks, now a California-based company, is a part of the Business Intelligence Software Industry. The company has 4000+ employees working on all of its sites and it has already witnessed an annual recurring revenue of more than $300 million in the month of February 2021.

Freshworks - Target Market Audience

Freshworks brings in cutting-edge SaaS customer engagement solutions for startups and other business professionals. It targets businesses of all sizes and all kinds and makes it easy for the operating teams to acquire customers and keep them engaged for life. The company currently operates in India and the US. Β 

Freshworks will continue to acquire new customers and catalyze global brand awareness using a variety of Google resources. Freshworks expects to use Google Translation Services to expand globally as its product range grows.

Freshworks - Startup Story

The founder of the company was an employee of Zoho Corporation. While Girish was reading an article on Hacker News, he found Zendesk raising their prices from 60% to 300% and how the Zendesk users were unhappy about it. He found a comment, where it was written that there's a big opening in the market for someone to come in and take all of Zendesk's and eSupport's customers. It was a slap on his face.

Girish knew that the opportunity was sitting right in front of him and also that he had knowledge about the transition taking place. He then thought that he should do something in the customer support market delivered as SaaS.

The next few weeks turned out to be stressful. He was very excited about this new idea but didn't expose the fact. Mathrubootham spoke to his friend Shan Krishnasamy about the matter and they immediately agreed. They both resigned from Zoho and coupled with Vijay Shankar to bring Freshworks into existence with a team of six people as Freshdesk.

The founder trio soon set up a 700 sqft warehouse in Chennai to launch their IT helpdesk company in 2010. This new startup not only started to change the ways the customers interacted with the companies using social media but also helped the companies to address the customer complaints across diverse channels.

It was around eight years of hardwork, which led the company to scale its revenue to touch the $100 million mark. Soon after, Freshdesk was rebranded to Freshworks, the success of which followed and helped it set up its headquarters in the US, thereby bringing the company closer to a majority of its userbase.


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Freshworks - Founders And Team

The founders of Freshworks are Girish Mathrubootham, Shan Krishnasamy and Vijay Shankar. It was founded in 2010, in Chennai.

Girish Mathrubootham

Starting his career as a Member of Technical Staff at HCL Cisco ODC, Mathrubootham served as a Senior Software Engineer at eForce and then went on to become a Lead Engineer and a Product Manager AdventNet Inc.

After staying with the company for over 4 years, Girish landed a job at Zoho Corporation, where he joined as a Director and was later promoted to the position of Vice President - Product Management. Girish Mathrubootham worked with Zoho for over 5 years before founding Freshworks in 2010.

Girish Mathrubootham, Shan Krishnasamy
Girish Mathrubootham (Left) and Shan Krishnasamy

Freshworks CEO and Founder Girish Mathrubootham has been given $233.41 million in stock awards, which will be vested over the next 7 years, which will make it one of the biggest compensation packages received by an Indian business leader in recent years. Girish Mathrubootham received a salary of $611,980 in 2021, and the additional stock award that he will receive is exclusive of his salary.

Shan Krishnasamy

Shan Krishnasamy is also the Co-Founder of Freshworks. He too used to work at Zoho Corporation as a Technical Architect, where he worked for over 9 years before co-founding Freshworks. Shan pursued his Bachelor's degree from TPGIT and is currently serving as a Co-Founder and CTO at Freshworks.

Vijay Shankar

Vijay Shankar
Vijay Shankar

Vijay Shankar is the Co-founder and Director of Solutions Engineering at Freshworks. He is the principal solutions consultant of the company. Vijay had worked for the company right from the initial stages and is experienced in building multiple high-performance support teams from scratch.

Vijay started his career as a Tech Support Engineer at HCL, who then went on to work for Zoho Corporation as a Pre Sales Technical Consultant. Then, he went for Millicent Technologies and finally founded Freshworks along with the other 2 founders.

Freshdesk is currently around 4K employees strong.

Freshworks - Name, Logo and Tagline

Freshworks Logo
Freshworks Logo

Freshworks, as the name suggests refers to a "Fresh" helpdesk that creates a customer service management platform to help businesses improve the market experience by 'refreshing business software', which is the company's tagline.

Freshdesk got rebranded as 'Freshworks' in June 2017 meanwhile evolving its products as well.

Freshworks - Vision and Mission

Freshworks' mission statement says, "To help companies better engage and communicate with their customers and employees with refreshing business software that is easy-to-use, feature-packed and accessible to businesses of all sizes."

The vision of Freshworks is to become "One of the most loved companies in the world."

Freshworks - Business Model

The Freshworks business model depends on upmarket sales and its products. The company has got a unique global inside sales model. Business software is expensive and hard to use. People waste hours to get things done. In the end, corporations hire employees to take care of the software.

To tap into this market, Freshworks decided to provide quality and ready-to-go software, which is easier to use. This is why the customers trust the Freshworks products and are also backed by impressive support.

Freshworks' emphasis in 2010 was on creating and selling goods to small and medium-sized businesses. Due to the effective and easy solutions that the company came up with, it began to gain prominence within larger corporations throughout the years.

Freshworks started the transformation and evolution of its services by expressing its broader vision of helping companies win lifetime loyalty. The unique Indian democratic design principles of Freshworks help the company create software that is simple, scalable, inexpensive and encapsulates true craftsmanship, all the while enabling businesses to be self-reliant.

Freshworks has a wide range of products for small and medium-scale businesses, entrepreneurs, and business professionals. Freshmarketer, Freshsales, and Freshdesk are some of its core products, which have been bundled together in the form of a unified product suite for startups launched by the company on November 11, 2021. This is a part of the company's startup initiative that was launched in 2019 and has successfully onboarded 2,500 startups so far, out of which 500 of them are paying customers of the company. Freshworks claims that its products are used by 150+ unicorns or around 20% of the unicorns globally.

Here's a look at the products list of Freshworks:

Freshteam

Freshteam Homepage
Freshteam Homepage

This Freshworks product is a smart HR software that aims to provide businesses with an opportunity to modernize their HR department.

Freshservice

Freshservice Homepage
Freshservice Homepage

Freshservice from Freshworks helps the companies to modernize their ITSM (IT Service Management)

Freshmarketer

Freshmarketer Homepage
Freshmarketer Homepage

This product from Freshworks is designed as a marketing automation software that will let businesses personalize their messages

Freshsales

Freshsales Homepage
Freshsales Homepage

Freshsales from Freshworks is built to aid the companies in accelerating their revenues via content-driven sales

Freshdesk

Freshdesk Homepage
Freshdesk Homepage

Freshworks extends Freshdesk as an omnichannel service provider.


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Freshworks - Revenue and Growth

Freshwork's remarkable growth curve is a reflection of how companies are searching for new and creative ways to engage with their customers, as well as the company's creativity and tenacity.

In mid-February 2021, the company announced it surpassed the $300 million mark in its annual recurring revenues, thereby growing by around 40% year-over-year even in the challenging, pandemic-strick times.

By opening offices in Paris, the Netherlands, France, and Utrecht, the company expanded its corporate network. This followed the expansion of the current London office. It also hosted Refresh19 London, which was the city's first meeting, and was attended by about 400 people.

Furthermore, the company also expanded its presence in APAC outside of Europe by collaborating with OrangeOne Corporation, a leading tech company in Japan. Freshworks currently has offices in Hyderabad, Melbourne, and many other cities across the globe. All of these show how the business is expanding on a wider scale.

Some other prominent growth highlights of the company are:

  • Freshworks has enabled over 50,000 small and big companies across the globe to exceed customer and employee expectations.
  • Freshworks’ products are used by the people and businesses of over 120 countries around the world.
  • Freshworks claims to be the first Indian Saas company to have been listed in Nasdaq, US.
  • Freshworks claims to be the first Indian Saas company to reach a billion-dollar valuation.

Freshworks CEO and Co-Founder, Girish Mathrubootham, post its IPO listing on September 22, 2021, announced that around 500 employees having shares in the company have turned into crorepatis almost overnight, following the listing.

Furthermore, around 70 of them are aged under 30 years, "People who have graduated college a few years ago and they fully deserve it for believing in us over the past ten years", as reported by the Freshworks CEO. The company currently boasts of having around 4,300 employees globally.

Freshworks Financials

Freshworks has reported around 46% growth in its revenues, which stood at $96.6 million during the third quarter between July-September 2021 for the company. The company reported an increase in its total revenue, which was recorded at $114.6 mn, thereby exhibiting a 42% YoY growth in the first quarter (Q1) of FY2022. With this, the US-listed Indian company has successfully recorded more than $100 mn in revenue for the second consecutive occasion.

The consolidated losses of the company increased to $107.4 million, including the July-September 2021 quarter, which came on the back of a huge rise in expenses at 305% to $214.63 million. Freshworks losses were recorded at $49.1 million during the January-March 2022 quarter, which was quite an increase from the net losses of $2.4 million reported in the corresponding quarter of the previous year. Β 

Freshworks - Funding And Investors

Freshworks has raised a total of $484 million in funding over 9 rounds. The company is funded by 6 investors, Steadview Capital and Accel are the most recent investors.

Date Transaction Name Money Raised Lead Investors
January 1, 2020 Secondary Market $85 million Steadview Capital
November 4, 2019 Series H $150 million Accel, CapitalG, Sequoia Capital
July 31, 2018 Series G $100 million Accel, Sequoia Capital India
November 1, 2016 Series F $55 million Sequoia Capital India
April 20, 2015 Series E $50 million Tiger Global Management
June 12, 2014 Series D $31 million Tiger Global Management
November 21, 2013 Series C $7 million Accel
April 26, 2012 Series B $5 million Tiger Global Management
December 2, 2011 Series A $1 million Accel

Freshworks - IPO

Freshworks was looking forward to raising up to $912 million through its IPO round, as per the regulatory filings of the company with the US Securities and Exchange Commission dated September 13, 2021.

The company then decided to sell 28.5 million of its Class A common stock between $28 and $32 per share. It was also announced that if the shares of the company would successfully be sold at the higher range, then it would raise around $912 million, thus increasing the valuation of the company to around $9 billion.

Freshworks further confirmed that it would be going public and had already filed the initial public offering in the United States, where the company is presently headquartered. According to the company's filings with the US Securities and Exchange Commission, Freshworks was then looking to raise around $100 million, in an IPO round led by Morgan Stanley, Bank of America, and JP Morgan Chase. However, that was just a placeholder amount.

The company finally went public on September 22, 2021, and successfully raised over $1.03 billion in its IPO round. Soon after its IPO listing, Freshworks also listed itself on the NASDAQ stock exchange. The price of the shares surged to $36 per share from $32-34 per share or $28-32 per share, which it announced a week ago. The last share price of Freshworks was recorded at $19.25 in Feb 2022.

The IPO has increased the market cap of Freshworks to over $10 billion, which was $9 billion earlier. With a market valuation of $10 billion, Freshworks was leading the band of Indian Saas startups, even ahead of Postman valued at $5.6 billion, and Browserstack valued at $4 billion. Besides, Freshworks also became the first software startup of Indian origin to be listed on the NASDAQ stock exchange. Freshworks was even valued at $13.56 billion on November 2, 2021, when the intraday high peaked at $53.35 per share, where the Girish Mathrubootham-led company also overtook Zendesk, which was valued at $12.1 billion then. The Freshworks market cap is $4.57 billion, as of May 2022.

The company had earlier mentioned that it has a large addressable market of around $120 billion ahead, in its regulatory filings with the US Securities and Exchange Commission earlier in September. It has also estimated the annual potential market opportunity for its products to be $77 billion.

It might use a portion of the proceeds for acquiring complementary businesses, products, services, and technologies, said Freshworks while it was filing its IPO with SEC.

Freshworks Shareholding

Freshworks listed its shareholders in its IPO papers filed with the United States Securities and Exchange Commission (US SEC), where the company has recorded Tiger Global as the majority stakeholder with 26% shares in Freshworks. The others that follow are Accel, Sequoia Capital, Capital G, Girish Mathrubootham, and Others.

Freshworks Shareholding Pattern

Freshworks - ESOPs

Freshworks on November 9, 2021, announced the initiation of a share sale worth $500+ mn from its board of directors, top management, current, and former employees, third-party consultants, contractors, and more. This cashout is certainly counted among the largest cashouts in recent years. Β 

Freshworks - Investments

Freshworks has made 3 investments to date.

Date Organization Name Round Amount
Oct 3, 2019 Fyle Series A $4.5M
May 24, 2019 Fyle Series A $142.33K
Apr 20, 2018 Fyle Series A $1.1M

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Freshworks - Acquisitions

Freshworks has acquired 13 organizations in Flint on Jul 9, 2020, being the most recent.

Acquiree Name Date Amount About Acquiree
Flint Jul 9, 2020 - Flint is the most advanced and innovative open standards-based automation platform.
AnswerIQ Feb 26, 2020 - AnswerIQ is an artificial intelligence service in the customer support space.
CanvasFlip Sep 17, 2019 - CanvasFlip is a cloud-based design collaboration and testing platform.
Natero May 21, 2019 - Natero harnesses your data to predict, analyze and drive customer behavior.
Zarget Aug 29, 2017 - Zarget is a SaaS-based conversion rate optimization company that provides comprehensive solutions for small- and medium-sized businesses.
JoeHukum Jul 20, 2017 - JoeHukum Is Your Virtual Personal Assistant. From Flight Booking To Food Delivery
Pipemonk (Formerly ZapStitch) Jan 4, 2017 - Pipemonk is a data integration platform that allows companies to synchronize and move data amongst multiple cloud apps quickly and easily
Chatimity Oct 18, 2016 - Chatimity is a social chat application helping people discover others based on locality and interests.
Airwoot Apr 13, 2016 - Airwoot is a real-time customer support provider enabling brands to provide customer support on social media.
Framebench Feb 22, 2016 - Changing how people interact with files on the web & mobile

Freshworks - Awards and Recognition

The most recent awards and recognition of Freshworks are:-

Year Recognition Name
2019 Supreme Software Award for 2019
2019 Expert’s Choice for 2019
2019 Great User Experience for 2019
2020 Summer Leader 2020
2020 Spring Leader 2020
2020 Top 10 Fastest Growing Software in Q1 2020
2020 Top 10 Most Searched Software in Q1 2020
2020 Best call center software for 2020
2020 VoIP phone services for 2020

Freshworks - Competitors

The top Freshworks competitors are :

  • Zendesk
  • Salesforce
  • Zoho
  • ServiceNow
  • Microsoft
  • Cherwell
  • Oracle
  • Coheris

Freshworks - Challenges Faced

Freshworks, being a fast-growing Business-to-Business, Software-as-a-service company with thousands of B2B and B2C clients, including legacy corporations, which are fast-growing billion-dollar businesses, must ensure that its services have minimal downtime, outages, or latency.

β€œTo do this, we need to have visibility into the infrastructure, how it is behaving at any given point of time and how our customers are using our products from an infrastructure standpoint,” says Pradeep Thangavel, Engineering Manager, at Freshworks, "Because Freshworks is integrated on to the customer’s platform, any traffic that comes to the customer’s platform is as good as traffic to the Freshworks platform."

Further, Pradeep explains how this challenge is difficult because no other Indian B2B SaaS company functions on the same level as Freshworks', which means the company lacks simple access to industry benchmarks or learnings in terms of aligning their infrastructure optimally for daily services.

Freshworks - Future Plans

Freshworks presently assists businesses by providing intelligent customer engagement software which improves their IT operational efficiency.

Employees at Freshworks were able to see the magic in action, which added to the excitement of the trip. All of this entails pursuing bigger deals meanwhile still expanding our existing customers.

The company has grown from a small startup producing tools for small businesses to a mid-sized business that caters to larger businesses, pushing them to rethink their marketing and sales strategy.

In 2020, a freshworks spokesperson told, β€œWe are actively focusing on building the business, driving growth in new markets, and strengthening our position in existing markets. We will aim for an IPO if and when a public offering proves opportune for the business.”

Freshworks' expansion has been aided by solid financials, an acquisition-led growth strategy, and the bundling of a suite of services with individual goods.

FAQs

What does Freshworks do?

Freshworks is a cloud-based company that creates sales & support solutions that help businesses improve the market experience. The company's services facilitate connectivity and enable teams to interact and engage customers and subordinates in order to tackle technological concerns.

Is Freshworks an Indian company?

Yes, Freshworks is an Indian company founded by Girish Mathrubootham, Shan Krishnasamy and Vijay Shankar in Chennai, in 2010.

What is the valuation of Freshworks?

Freshworks is currently valued at $4.57 billion, as of May 2022.

When was Freshworks founded?

Freshworks was founded in 2010 by Girish Mathrubootham, Shan Krishnasamy and Vijay Shankar.

Who is the founder of Freshworks?

Girish Mathrubootham, Shan Krishnasamy and Vijay Shankar are the founders of Freshworks.

Is Freshworks a product-based company?

Yes, Freshworks is a product-based company.

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