Freshworks Stock gained 32% after raising $1 billion in IPO

Freshworks Inc. gained 32 percent after raising $1 billion in an IPO priced over the advertised range.

Image: Freshworks

The software company’s stock ended at $47.55 in New York trade on Wednesday, giving it a market worth of $13 billion. Freshworks’ fully diluted valuation would be more than $14 billion if employee stock options and restricted stock units were factored in.

In a 2019 financing round, the prospective challenger to considerably bigger Inc. was valued at $3.5 billion. Freshworks sold 28.5 million shares for $36 each on Tuesday, after selling them for $32 to $34 apiece, a goal it had raised from $28 to $32.

Freshworks had a 40% increase in revenue last year after the coronavirus epidemic drove firms to go digital, and revenues are expected to continue to rise in the first half of 2021, while the company’s net loss narrows.

With 52,500 clients, the company’s sales increased to $169 million in the first half of this year, up from $110 million in the first half of 2020. According to the company’s papers, its net loss decreased to $9.8 million from $57 million a year before.

Stakes of Accel

Freshworks began in India and then relocated to Silicon Valley in order to be closer to its clients. The firm is now located in San Mateo, California, although it still employs a large number of people in Chennai, India. Freshworks creator Girish Mathrubootham compared the program to the iPhone in filings with the US Securities and Exchange Commission, arguing that firms shouldn’t have to rely on numerous tools to connect with consumers.

Accel India and Tiger Global Management affiliates each own more than a fifth of the company’s Class B shares.

Mathrubootham stated that his first goal for the firm was to generate $1 million in sales. He claimed that was until Accel’s Shekhar Kirani suggested an IPO in the United States.

“He said you can either sell Freshworks for a lot of money or you can be the first Indian SaaS firm to go public in the United States, which would be a historic milestone,” Mathrubootham added. “And it was from that moment forward that the dream toward today began.”

Appreciative to Salesforce

He went on to say that CEO Marc Benioff is a “great leader.”

He stated, “We have enormous respect for Salesforce and what they’ve built.” “We would want to see Freshworks reach even higher heights.”

Freshworks board member and Accel partner Sameer Gandhi claimed the business didn’t require U.S. sales expertise to get off the ground.

“The product needs to be the salesperson,” he added, adding that the company’s software is straightforward and simple to use, which helps it expand. He went on to say that he expects the firm to make more acquisitions in the future.

Morgan Stanley, JPMorgan Chase & Co., and Bank of America Corp. led the IPO. The Nasdaq Global Select Market trades Freshworks shares under the ticker FRSH.

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