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The first Indian SaaS IPO: Story of Freshworks

I am a 1st year MSc student studying EMIT at Bocconi University and I come from New Delhi, India. I am highly interested in innovation and technology, love travelling and following different sports.

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On September 23rd, 2021, Freshworks filed for an IPO becoming the first Indian SaaS company to be listed on Nasdaq. Although this might sound somewhat ordinary, given that various companies are going public these days, a brief look at their journey gives an insight of the struggles and delight experienced by the founders, investors, employees and their customers.

‘Over 500 Freshworks employees become millionaires with 70 out of them below the age of 30’ read the headline thanks to the Chennai (city in India) and Silicon Valley-based company Freshworks going public and getting listed on Nasdaq and being valued at a whopping $10.1 billion, the very first Indian SaaS (Software as a service) company to do so. Initially known as Freshdesk, Girish Mathrubootham founded the company in 2010 after getting intrigued by a comment he read on a website which shared the disappointment of customers as the company where he was initially working (Zoho Corporation), had raised the prices of its services by 60%. That’s where it all began, leaving his well-paid job to establish a better segment of customer engagement software for businesses. The idea was to create a software that is easy, scalable, inexpensive and most of all encapsulates true craftsmanship.

It was a big decision on his part and the journey was surely not easy. Around the 2010’s there were no other global SaaS companies based in India and there really wasn’t any excitement for the mainstream investors to pursue this sector. Girish had to start his journey all over again with little funding available. He started by entering contests where he was required to write a blog on “lean start-ups”. He wrote about the Freshworks story and, although he didn’t win it, his blog went viral soon. There were hundreds of signups even before the product was ready and surprisingly none of them were from India, making them an international company from day one. Their first customer was from Australia and from then on there were flows of investment from major Venture capital firms.

One major decision to be taken was whether to establish their office in the US or back in India. Although they initially started the company in a small warehouse in Chennai, they ultimately decided to remain in the US for setting up their headquarters mainly because the company’s preferred payment gateways worked better with the US banks than the Indian ones. Freshworks went from 0 to $100 million in 8 years and added a further $100 million in the next year and a half over 9 rounds of investments. Apart from the numbers, a quick glance at their major customers tells us that many are well established companies such as Hugo Boss, Cisco, Toshiba, Honda. It was the belief in the investors that the company had built that lead to its successive investments over the years. What set it apart was the control that users finally had over their experiences, thus ensuring investor and customer loyalty.

On a more personal note, much of the success can also be attributed to the difficulties Girish endured in his personal life. Born and brought up in a middle-class family and experiencing the divorce of his parents when he was merely 7 shows how tough he had to be to overcome all these challenges. He completed his studies on borrowed money and faced rejections from several companies who did not deem him good enough to work in the software industry. After working for few years in several companies, it was when he joined Zoho that he acquired most of his skills: learning about sales, building his leadership skills and an unrelenting passion to serve his customers. As Girish quotes “it’s much harder to build a company loved by employees, customers and shareholders. That’s why we love companies like Google: customers love the product, employees love the culture, and shareholders get the value. That is a dream for me personally to focus as much on that front”.

Today 76% of the employees own shares in Freshworks and he has big plans to further the company in the future. He has also been actively part of various angel investor groups and is always willing to take time out to help entrepreneurs in their early stages. This helps him keep on track with the new developments occurring in different technologies and there is always something new to learn while working with these young entrepreneurs.

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I am a 1st year MSc student studying EMIT at Bocconi University and I come from New Delhi, India. I am highly interested in innovation and technology, love travelling and following different sports.

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