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Freshworks raises $100 million, becomes India's newest unicorn

The infusion, led by Sequoia and Accel Partners, will be used to expand Freshworks’ global footprint as well as continue investment in its integrated Software-as-a-Service platform.

, ET Bureau|
Updated: Aug 01, 2018, 08.53 AM IST
Freshworks raises $100 mn from Sequoia, Accel; valuation touches $1.5 bn
Freshworks raises $100 mn from Sequoia, Accel; valuation touches $1.5 bn
CHENNAI: Customer engagement software maker Freshworks said it has secured $100 million in a financing round that values it at about $1.5 billion, making it the country’s latest unicorn.

The infusion, led by Sequoia and Accel Partners, will be used to expand Freshworks’ global footprint as well as continue investment in its integrated Software-as-a-Service platform, according to Girish Mathrubootham, the company’s CEO. “We will continue our worldwide expansion. Being a SaaS company, geography has never been a limiting factor. At this time, we are expanding in the US, Australia and New Zealand, EMEA, APAC and Europe markets,” Mathrubootham said.

Chennai-based Freshworks is one of the first pure-play India-based SaaS companies to become a unicorn. The company has so far raised $250 million in funding.

The round, which saw participation from Alphabet’s CapitalG, is likely its last private raise before a potential public listing, according to industry executives.

In June, Freshworks had crossed the $100-million mark in annual recurring revenue, helped by growth in the company’s flagship customer support product, Freshdesk, and the growing revenues of its IT services management product, Freshservice, and customer relationship management product, Freshsales.

“(The Unicorn status) was something that was bound to happen with the talent we have and the growth we have shown right from the start,” said Mathrubootham. “This does not change the way we look at ourselves in any way. We are in a phase of rapid growth and things move quickly.”
The company has also hired Suresh Seshadri, former vice-president of finance and treasury at AppDynamics, as the new chief financial officer. Seshadri had helped AppDynamics prepare for its IPO before the company was acquired by Cisco in 2017.

Mathrubootham, who had earlier spoken about the company’s plans to go public, said Seshadri will play a big role in planning Freshworks financial strategy. “We will eventually need (Seshadri’s) expertise in IPO processes when we do go public,” said Mathrubootham.


Freshworks has more than 150,000 businesses and organisations as clients, including enterprises such as Honda, Bridgestone, Hugo Boss, Toshiba, Cisco and global small and medium business (SMB) customers. The company has also made nine acquisitions till date.
Close to 36% of its revenues come from larger customers and the remaining is from SMBs, Mathrubootham had said in an earlier interview with ET. The company recently came up with a fully-integrated cloud bundle called Freshworks 360, which brings together sales, marketing and support applications to provide users with a complete customer engagement experience. Products contained in Freshworks 360 include Freshdesk, Freshsales, Freshmarketer, Freshcaller and Freshchat. “It shows that there is investor appetite and companies are starting to break out and scale to globally meaningful size. Freshworks is the flag bearer, but there is a broader group (of India-based SaaS companies) that has started seeing meaningful scale like Browserstack, Capillary (Technologies) and a whole bunch of others. Also, there are the traditional software companies... the 1.0... which have gone north of $100 million (in ARR) too,” said Klaas Oskam, managing director of DCS Advisory.
Freshworks joins the growing list of recently minted unicorns like Education technology platform Byju’s, online food-delivery company Swiggy, online financial marketplace Policybazaar, and online-to-offline retail marketplace Paytm Mall.

Other companies in the SaaS space that have raised funds recently include Chennai-based Chargebee, which secured $18.5 million in a Series-C round from New York-based Insight Venture Partners. The company offers recurring billing solutions. Mumbai and US-based web testing platform BrowserStack closed $50 million in a Series-A round from Accel Partners earlier this year.

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