Freshworks Takes A Step Towards US Listing With AnsweriQ Acquisition

Chennai-based software-as-a-service (SaaS) unicorn Freshworks has acquired Seattle-based artificial intelligence (AI) startup AnsweriQ for an undisclosed amount. The company believes that AnsweriQ’s product line will complement its own AI engine, Freddy.

Founded in 2017 by Pradeep Rathinam and Prashant Luthra, AnsweriQ is an AI service in the customer support space. “The integration of AnsweriQ’s technology enhances our AI/ML [Artificial Intelligence/ Machine Learning] capability in the customer engagement space and offers significant value to our customers,” said Girish Mathrubootham, Freshworks’ founder and CEO.

This integration will help the companies’ clients leverage their data in order to automate and deescalate queries from their customers. In its press release, Freshworks highlighted that Freddy will incorporate AnsweriQ’s AI to learn from ticket data and agent action within the Customer-for-Life Cloud and improve customer self-service capabilities. With this acquisition, Freddy will be able to anticipate customers’ needs and make recommendations based on the conversations. Besides that, Freddy will also be able to perform tasks such as refunds and cancellations without any human assistance.

AnsweriQ’s cofounder and CEO Pradeep Rathinam will join Freshworks as chief customer officer. “Pradeep brings executive-level acumen and expertise, which will be leveraged in his new role as chief customer officer as we double-down on our efforts to engage and keep customers for life,” said Girish Mathrubootham, Freshworks’ founder and CEO.

The SaaS unicorn was founded in 2010 by Girish Mathrubootham and Shan Krishnasamy as Freshdesk, which offered helpdesk software for customer support. The company rebranded itself to Freshworks in June 2017.

Freshworks claims to have over 150K clients across the globe which includes leading companies such as the NHS, Honda, Rightmove, Hugo Boss, Citizens Advice, Toshiba, Cisco, and others. The Chennai-based startup has around 35K paying customers and its billings in the first quarter of the financial year 2020 increased by 69%. The company now has more than 2,700 employees working in 13 offices around the world.

Freshworks also raised $150 Mn in Series H funding round led by Google, Sequoia and Accel at $3.5 Bn valuation in November 2019. The company had planned to use this funding to develop a more cohesive SaaS platform, called Customer-for-Life Cloud, for all key business verticals — marketing, sales, support and customer success.

In a statement, Freshworks cofounder and CEO Mathrubootham also said that the company’s annual recurring revenue (ARR) has crossed $200 Mn. He highlighted that Freshworks had crossed the $100 Mn AR mark in June 2018.

Now, the company is looking to list itself in the New York-headquartered stock exchange, NASDAQ. For this, Freshworks needs to create awareness regarding its brand in the US and the acquisition of AnsweriQ is going to solve that problem with its wide user base.

As per media reports, Mathrubootham has also moved to the US to prep up for the IPO and keep in touch with the Freshworks’ US headquarters.

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