Alphabet-backed CRM software provider Freshworks went public, boasting a market cap of $13.5bn.
US-based customer relationship management (CRM) software developer Freshworks, backed by internet and technology group Alphabet, raised $1.03bn in an initial public offering (IPO) on the Nasdaq Global Select Market. The company priced 28.5 million shares at $36 each, above the $32 to $34 range set earlier. Freshwork’s shares closed at $47.55, giving it a market capitalisation of $13.5bn. In November 2019, CapitalG – the growth equity arm of Alphabet, co-lead a $150m series H round, having also backed a $100m series G round in 2018 that was co-led by Sequoia Capital and Accel.
Founded in India and previously known as Freshdesk, Freshworks develops a variety of software employed by companies for CRM, customer experience and IT service management processes. The company claims that more than 52,000 businesses use its software-as-a-service products. It reported $169m of revenue and a $9.8m net loss for the six months ending June 2021, compared to $111m and $57.1m over the same period the year before. It had raised $400m in funding prior to the offering.
Freshworks is part of the broader digital marketing and adtech space, which has enjoyed much attention from corporate venture investors over the past decade and there has been no dearth of exits from it, as the GCV Analytics bar chart below illustrates. The number of exits from this space in previous years has been somewhat erratic and lacking a clearly defined trend. Throughout the first eight months of 2021, however, we have already registered 14 such exits worth an estimated total of $1.91bn, which suggest there may be an upward pressure on valuations of mature companies from this domain. This is likely to translate into more and more sizeable exits like Freshworks’ IPO.
