Bulletin
Investor Alert

IPO Report Archives | Email alerts

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

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

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Freshworks Inc. Cl A (FRSH)
  • X
    Salesforce.com Inc. (CRM)
  • X
    Zendesk Inc. (ZEN)

or Cancel Already have a watchlist? Log In

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 +4.15% 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 +0.95% and Zendesk Inc. /zigman2/quotes/209571012/composite ZEN +0.90% , as well as Oracle Corp. /zigman2/quotes/202180826/composite ORCL +2.02% and SAP SE AG /zigman2/quotes/207905606/composite SAP +1.66% . IT service management competitors include ServiceNow Inc. /zigman2/quotes/202729495/composite NOW +0.05% and Atlassian Corp. /zigman2/quotes/207177221/composite TEAM +1.46% . In customer relationship management, or CRM, software, it not only competes with Salesforce but also with Microsoft Corp.’s /zigman2/quotes/207732364/composite MSFT -0.51% 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
$ 46.92
+1.87 +4.15%
Volume: 1.34M
Oct. 22, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$13.20 billion
Rev. per Employee
$69,640
loading...
/zigman2/quotes/200515854/composite
US : U.S.: NYSE
$ 292.56
+2.75 +0.95%
Volume: 2.93M
Oct. 22, 2021 4:00p
P/E Ratio
117.13
Dividend Yield
N/A
Market Cap
$286.42 billion
Rev. per Employee
$375,437
loading...
/zigman2/quotes/209571012/composite
US : U.S.: NYSE
$ 135.23
+1.20 +0.90%
Volume: 1.37M
Oct. 22, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$16.23 billion
Rev. per Employee
$249,019
loading...
/zigman2/quotes/202180826/composite
US : U.S.: NYSE
$ 98.25
+1.95 +2.02%
Volume: 6.82M
Oct. 22, 2021 4:02p
P/E Ratio
20.87
Dividend Yield
1.30%
Market Cap
$268.58 billion
Rev. per Employee
$306,659
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 141.78
+2.32 +1.66%
Volume: 764,817
Oct. 22, 2021 4:00p
P/E Ratio
23.97
Dividend Yield
2.03%
Market Cap
$166.62 billion
Rev. per Employee
$304,253
loading...
/zigman2/quotes/202729495/composite
US : U.S.: NYSE
$ 686.65
+0.31 +0.05%
Volume: 928,553
Oct. 22, 2021 4:00p
P/E Ratio
814.53
Dividend Yield
N/A
Market Cap
$136.03 billion
Rev. per Employee
$345,104
loading...
/zigman2/quotes/207177221/composite
US : U.S.: Nasdaq
$ 423.20
+6.08 +1.46%
Volume: 851,372
Oct. 22, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$106.61 billion
Rev. per Employee
$324,752
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 309.16
-1.60 -0.51%
Volume: 17.45M
Oct. 22, 2021 4:00p
P/E Ratio
38.38
Dividend Yield
0.80%
Market Cap
$2321.14 billion
Rev. per Employee
$928,663
loading...
1 2
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.