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Sept. 21, 2021, 10:59 p.m. EDT

Freshworks IPO: 5 things to know about the customer software-as-a-service provider

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By Wallace Witkowski

Freshworks Inc. is scheduled to start trading Wednesday on the Nasdaq in what’s expected to be the biggest public debut in a week jam packed with initial public offerings.

The San Mateo, Calif.-based company, which provides customer experience and management services as well as IT management products, priced its IPO at $36 a share Tuesday night . That was above its expected range of $32 to $34 a share, which was previously upgraded from the original $28- to $32-a-share range.

Freshworks /zigman2/quotes/229432462/composite FRSH -0.02% expects to start trading with a ticker of “FRSH.”

With 281.4 million shares outstanding after the offering, or 284.3 million if underwriters exercise all options to cover with overallotments, the company is looking at a valuation of more than $10 billion.

Here are five more things to know about Freshworks before it starts trading:

They very much identify as the underdog upstart

With its wide swath of services, Freshworks competes with several established players. In customer experience software, it competes with Salesforce.com Inc. /zigman2/quotes/200515854/composite CRM +0.04% and Zendesk Inc. /zigman2/quotes/209571012/composite ZEN +3.91% , as well as Oracle Corp. /zigman2/quotes/202180826/composite ORCL -0.46% and SAP SE AG /zigman2/quotes/207905606/composite SAP -2.95% . IT service management competitors include ServiceNow Inc. /zigman2/quotes/202729495/composite NOW +0.52% and Atlassian Corp. /zigman2/quotes/207177221/composite TEAM +1.76% . In customer relationship management, or CRM, software, it not only competes with Salesforce but also with Microsoft Corp.’s /zigman2/quotes/207732364/composite MSFT +0.69% Dynamics service.

“Freshworks is the company that wasn’t supposed to win,” said Rathna Girish Mathrubootham, founder and chief executive, in the company’s S-1 filing.

In fact, the original company was all in response to a “poor customer service experience” Mathrubootham had, and the company persevered in a crowded help desk market, beginning in Chennai, India, where it was unlikely to grow a global software-as-a-service company.

 “Now, our dream is to be a disruptive player in the CRM market by breaking down the silos of marketing, sales, and customer support with a unified customer cloud,” Mathrubootham said. “And in the future, we dream of breaking the silos of IT and HR, building a unified employee cloud.”

For more than $1 billion, don’t expect any votes

With an offering of 28.5 million shares, and an additional 2.9 million shares to cover overallotments, the company stands to raise up to nearly $1.07 billion.

The offering is for Class A shares, however, adding to the already 252.9 million Class B shares that exist. On top of that, the Class A shares in the offering only hold one vote, while the Class B shares hold 10 votes, so new shareholders will only get about 1% of voting power following offering.

Read: IPO market braces for 14 deals this week — including payment processor Toast — unless Evergrande woes send issuers scurryin g

Accel, Tiger Global see big return on decade-long investment

Up until now, Freshworks has already raised $484 million from investors, according to Crunchbase. The first investors were Accel and Tiger Global, which sunk $1 million into Freshworks’ Series A round nearly a decade ago.

From there Accel and Tiger Global have been a part of each funding round, with firms like CapitalG and Sequoia Capital participating in other rounds, last with a Series H round back in 2019 for $150 million, which valued the company at $3.4 billion.

/zigman2/quotes/229432462/composite
US : U.S.: Nasdaq
$ 45.16
-0.0100 -0.02%
Volume: 708,001
Oct. 21, 2021 3:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.71 billion
Rev. per Employee
$69,640
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/zigman2/quotes/200515854/composite
US : U.S.: NYSE
$ 290.20
+0.11 +0.04%
Volume: 1.69M
Oct. 21, 2021 3:00p
P/E Ratio
116.09
Dividend Yield
N/A
Market Cap
$284.00 billion
Rev. per Employee
$375,437
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/zigman2/quotes/209571012/composite
US : U.S.: NYSE
$ 133.43
+5.02 +3.91%
Volume: 1.35M
Oct. 21, 2021 3:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$15.41 billion
Rev. per Employee
$249,019
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/zigman2/quotes/202180826/composite
US : U.S.: NYSE
$ 96.20
-0.44 -0.46%
Volume: 3.80M
Oct. 21, 2021 3:00p
P/E Ratio
20.42
Dividend Yield
1.33%
Market Cap
$264.18 billion
Rev. per Employee
$306,659
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/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 139.42
-4.24 -2.95%
Volume: 1.16M
Oct. 21, 2021 3:00p
P/E Ratio
23.57
Dividend Yield
2.07%
Market Cap
$170.15 billion
Rev. per Employee
$304,253
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/zigman2/quotes/202729495/composite
US : U.S.: NYSE
$ 684.63
+3.52 +0.52%
Volume: 397,010
Oct. 21, 2021 3:00p
P/E Ratio
811.79
Dividend Yield
N/A
Market Cap
$134.93 billion
Rev. per Employee
$345,104
loading...
/zigman2/quotes/207177221/composite
US : U.S.: Nasdaq
$ 416.90
+7.21 +1.76%
Volume: 755,850
Oct. 21, 2021 2:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$103.21 billion
Rev. per Employee
$324,752
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/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 309.53
+2.12 +0.69%
Volume: 10.39M
Oct. 21, 2021 3:00p
P/E Ratio
38.43
Dividend Yield
0.80%
Market Cap
$2308.00 billion
Rev. per Employee
$928,663
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