Freshworks became the first Indian software-as-a-service (SaaS) firm to list on Nasdaq stock exchange, raising over $ 1.03 billion from investors through its IPO at a market cap of $10.13 billion on September 22, 2021.
It has been one of the most anticipated IPOs of 2021, amid increased digitization and growing adoption for remote work during the COVID-19 pandemic.
— Freshworks Inc (@FreshworksInc) September 22, 2021
“I feel like an Indian athlete who has won the gold medal at the Olympics,” said Freshworks co-founder Girish Mathrubootham during the iconic bell-ringing ceremony at Nasdaq MarketSite on Wednesday. He has been the flagbearer of India’s SaaS industry that has boomed in recent years.
“We are showing the world what a global product company from India can achieve. The fact that we are doing it first in the US markets is truly amazing. Today is day zero for Freshworks all over again and the beginning of so much more,” said Mathrubootham.
Today is a dream come true for me – from humble beginnings in #Trichy to ringing the bell at @Nasdaq for the FreshWorks IPO. Thank you to our employees, customers, partners, and investors for believing in this dream. #Freshworks #IPO #NASDAQ pic.twitter.com/fXz73YxXXR
— Girish Mathrubootham (@mrgirish) September 22, 2021
SaaS is the flavor of the season
The public offering comes at a time when SaaS IPOs in the US have performed spectacularly, creating billionaires overnight. The listings of Snowflake, Zoom, Cloudflare and Palantir — already large private companies becoming even larger public companies — have also sparked a new wave of enthusiasm from venture capitalists, private equity funds and hedge funds.
Shares of the software company closed at $47.55 Wednesday in New York trading, giving it a market value of $13 billion. Freshworks would have a fully diluted value of more than $14 billion, accounting for employee stock options and restricted stock units.
The potential competitor to far larger Salesforce.com Inc. was valued at $3.5 billion in a 2019 funding round. Freshworks sold 28.5 million shares Tuesday for $36 each after marketing them for $32 to $34, a target that the company had elevated from $28 to $32.
Freshworks boosted revenue about 40 percent last year after the coronavirus pandemic prompted businesses to go digital, and sales continue to grow in the first half of 2021 while its net loss shrank.
Freshworks plans to use the proceeds from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. It may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies.
Freshworks listing adds 500 new millionaires back in India
Freshworks IPO creates more than 500 crorepatis in India, with 70 of them aged below 30. The stellar market debut has enriched Mathrubootham and early investors such as Accel and Sequoia and turned hundreds of Freshworks employees into millionaires.
“Our employees are also our shareholders. This IPO has allowed me the opportunity to fulfill my responsibility as a CEO to early shareholders, both VC investors and employees, who believed in the dream of Freshworks,” said Mathrubootham.
We needed all the trust and belief of the early employees and investors, who joined us and believed in the dream. As CEO, it is immensely fulfilling for me to finish my responsibility as I take on the new responsibility of public investors who have now invested in the future of Freshworks,” he added.