A couple of months ago, this reporter asked Freshworks founder and CEO Girish Mathrubootham if he, too, would offer BMW bikes to hire engineers, something that fintech BharatPe had announced amidst the intense war for tech talent. “No, we will equip them so that they can buy them on their own,” he responded, without hesitation.
It seems like Mathrubootham may have pulled that off with Freshworks' Nasdaq listing. The stellar market debut has not only enriched Mathrubootham and early investors such as Accel and Sequoia but also turned hundreds of Freshworks employees into millionaires.
"Our employees are also our shareholders. This IPO has allowed me the opportunity to fulfil my responsibility as a CEO to early shareholders, both VC investors and employees, who believed in the dream of Freshworks. We needed all the trust and belief of the early employees and investors, who joined us and believed in the dream. As CEO, it is immensely fulfilling for me to finish my responsibility as I take on the new responsibility of public investors who have now invested in the future of Freshworks," Mathrubootham said in an interview with Moneycontrol hours after ringing the Nasdaq bell.
"Seventy-six percent of our employees hold shares. The number was higher, at 90 percent, but because we have been hiring so many people recently, it is 76 percent. For our employees in India, we have more than 500 crorepatis and 70 of them are under the age of 30. They passed out of college a few years ago and they fully deserve it," he added.
Business software maker Freshworks made its trading debut on Wednesday at $43.5 per share on the Nasdaq, up 21 percent from the company's listing price of $36 per share, giving it a market cap of $12.3 billion.
Freshworks, which is the first Indian software-as-a-service firm to go public on the US stock exchange, was last valued at $3.5 billion, when it raised $150 million in financing from investors such as Sequoia Capital, CapitalG and Accel in November 2019.
"I feel like an Indian athlete who has won a gold medal at the Olympics. We are showing the world what a global product company from India can achieve. The fact that we are doing it first in the US markets is truly amazing. Today is day zero for Freshworks all over again and the beginning of so much more" Mathrubootham said during the bell ringing ceremony.
How the proceeds will used
Freshworks plans to use the proceeds from the IPO for general corporate purposes, including working capital, operating expenses, and capital expenditure. It may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies.
This public offering comes amid increased digitisation and growing adoption of remote work during the Covid-19 pandemic, which has seen SaaS IPOs in the US perform spectacularly, popping (rising sharply) and creating billionaires overnight. The listings of Snowflake, Zoom, Cloudflare and Palantir have also sparked a new wave of enthusiasm from venture capitalists, private equity funds and hedge funds.Founded in 2010 by Mathrubootham and Shan Krishnasamy as Freshdesk, the company rebranded itself as Freshworks in 2017. It counts the likes of Accel, Sequoia Capital, and Tiger Global among its investors. Freshworks claims to have over 52,500 customers (as of August 31).