Freshworks to raise nearly $1bn through IPO


The California-based Freshworks Inc., which is headed by an Indian-origin entrepreneur, aims to raise nearly $1 billion through a public listing in the US at a valuation of almost $9 billion.

Founded by Girish Mathrubootham, Freshworks will become the most valuable software-as-a-service (SaaS) startup from India. It was last valued at $3.5 billion in November 2019. The company last month made its first filing with the US SEC for the IPO.

The company said it plans to offer 28.5 million Class A common shares at a price range of $28 to $32 per share. With this, the unicorn will look to raise between $798 million and $912 million through the initial public offering (IPO), in the latest filing with the US Securities and Exchange Commission (SEC) on Monday, September 13.

“We have two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock,” Freshworks said in its latest filing.

“Outstanding shares of Class B common stock will represent approximately 98.9% of the voting power of our outstanding capital stock immediately following this offering, with our directors, executive officers, and principal stockholders representing approximately 78.3% of such voting power,” according to the latest filing.

Freshworks follows a dual headquarter model between San Mateo, California, in the US and Chennai in India. Founded in India, most of Freshworks’ technology and operations team is based in the country.

The 11-year old startup has hired Morgan Stanley, JP Morgan, BofA Securities, Jefferies and Barclays, among others, to manage the share sale.

Girish Mathrubootham, the founder of Freshworks said in a letter, as a part of the IPO filing, “Freshworks is a very special company. We were unconventional from the beginning, not for its own sake, but because we saw an opening in the market for a unique approach… We offered a ‘fresh’ approach relying on efficient, product-led, low-cost, and low-touch sales; and we targeted massive, underserved markets. And we had one simple mantra: happy employees create happy customers. In fact, we made that our mission,”

Freshworks will be the first to lead the pack of Indian startups actively looking to list on the US exchanges in the coming months. The others include payments service provider Pine Labs, Walmart-owned online retailer Flipkart and mobile advertiser InMobi.