Signing up more public sector customers in India to be key focus area this year: Freshworks' Karthik Rajaram

Karthik Rajaram, Vice President & Country Head of India Business at Freshworks.

Nasdaq-listed Software-as-a-Service (SaaS) firm Freshworks will focus on acquiring and signing partnerships with more Indian state and central government ministries for 2023 as the country is accelerating digital transformation, said Karthik Rajaram, Vice President & Country Head of India Business at Freshworks.

“Our foray into the public sector or the government sector started during Covid when institutions reached out to us for digital transformation. Since then, there has been increased opportunity in this space,” Rajaram said.

To date, Freshworks counts several Central government entities and multiple state government bodies as customers using products like Freshdesk and Freshservice.

The Pension Fund Regulatory and Development Authority (PFRDA), which supervises and regulates all pensions in the country, needed a system to track and manage service requests to better serve their employees and chose to implement Freshservice in 2022.

“We see a lot of tailwinds in demand creation within the public sector in India…We are one of the few companies to have gotten empanelled on the government’s e-marketplace and it is helping us grow and get visibility in this segment,” Rajaram added.

The SaaS ecosystem in India and globally is impacted by the tight macroeconomic pressure and witnessing slowing demand growth ahead of a likely global recession are beginning to implement cost-cutting measures including layoffs.

In fact, Freshworks too announced two rounds of layoffs across teams in its offices in India and the US, impacting around 114 employees.

Rajaram said that while the impact is yet to cool down, Freshworks is focussing on the APAC (Asia-Pacific) and ASEAN (Association of Southeast Asian Nations) markets and addressing the problems of customer retention within startups and companies, which is helping them ride through this crisis.

“No one is isolated from what is happening from the macro standpoint. Everyone is impacted due to the macroeconomic pressure…Cost of customer acquisition has gone up and now many companies do not have money to spend on that, here is where customer retention becomes absolutely critical and this is why Freshworks is seeing a huge demand and helping many startups today,” He added.

Freshworks reported consolidated revenue from operations of $498 million for the full year 2022, up around 34 percent year-on-year, with its annual recurring revenue (ARR) for 2022 exceeding $500 million mainly on account of new business wins.

From the macro standpoint, North America still drives business for Freshworks. However, since the last year there is a slight shift towards the APAC and ASEAN parts of the world, Rajaram said.

“A lot of leapfrogging is happening in these economies…We have strong roots in India and going ahead we are focussing a lot of investments for this part of the world and making some significant strategic partnerships here,” He added.

Some of Freshworks India's startup customers include Yulu Bikes, Dunzo, Mahindra, and Kissht.