Freshworks Inc., a customer relationship management software, went on to file for an Initial Public Offering (IPO) worth $100 million with the US Securities and Exchange Commission. The SaaS unicorn filed for an IPO contending it’s customer relationship management software is providing a step towards unified cloud services.
According to the company, the net proceeds will go towards general corporate purposes, including catering to working capital needs, operating expenses and capital expenditure. They have appointed Morgan Stanley, J.P. Mogan, BofA Securities, Jeffries and Barclays as book managers to the IPO, among many others.
The company was last valued around $3.5 billion in November 2019. They have raised more than $327 million in funding till date from investors like Accel, CapitalG, Sequoia India and Tiger Global Management. With more than 52,500 customers across 120 countries, Freshworks Inc. reported a revenue jump of roughly 45% between calendar year 2019 and 2020. The total overall revenue stood at $250 million for calendar year 2020. The company also reported an 84% increase in net losses between 2019 and 2020. The losses stood at $57.3 million for the calendar year 2020.
Six months into the year 2021, ending June 30, Freshworks losses dropped by almost 83% to $9.84 million. The company stated in its risk factors that it might not be able to achieve profitability or continue rapid growth caused by the Covid-19 pandemic. Fireworks Inc. Founder and Chief Executive Officer Girish Mathrubootham said, “In addition to IPO, the company options also potentially included a merger with a special purpose acquisition company or a direct listing, as well as raising more capital from private investors.”
In a letter to investors in Friday’s filing with the U.S. Securities and Exchange Commission, Mathrubootham likened Freshworks software to the iPhone, saying businesses shouldn’t have to rely on multiple tools to engage with customers.
Freshworks Inc. is an eleven year old software-as-a-service (SaaS) startup. Software as a service (SaaS) is a software distribution model in which a cloud provider hosts applications and makes them available to end users over the internet. In this model, an independent software vendor (ISV) may contract a third-party cloud provider to host the application. Or, with larger companies, such as Microsoft, the cloud provider might also be the software vendor.
SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS). A range of IT professionals, business users and personal users use SaaS applications. Products range from personal entertainment, such as Netflix, to advanced IT tools. Unlike IaaS and PaaS, SaaS products are frequently marketed to both B2B and B2C users.
Categories: IPO Bankers