The Acquisition Is Aimed At Building New Marketing Solutions For Freshworks' Clients Across Sectors
SaaS based business software provider Freshworks has made its ninth acquisition in two years with marketing software startup, Zarget. Chennai-based Zarget, a software developer that provides marketers and designers with Conversion Rate Optimisation (CRO) tools, was acquired for an undisclosed amount.
The latest acquisition is part of Freshworks’ efforts to build a range of marketing solutions for businesses of all sizes and across various sectors.
Commenting on the development, Freshworks founder and CEO Girish Mathrubootham said, “At Freshworks, our ambition is to emerge as the de facto cloud-based business software platform for businesses of all sizes. Acquiring Zarget will enable Freshworks to support customers with the pre-acquisition journey as well and truly transform the way our customers attract and engage with their prospective customers. Also, I have known the Zarget team for many years and I am personally thrilled to have them join the Freshworks family and power our expansion into the marketing software category.”
Through the acquisition, Freshworks looks to further develop Zarget’s marketing suite, in order to bolster reach a wider group of customers.
Zarget Founders: From Working At Zoho To Creating Their Own Company
Founded in 2015 by former Zoho employees Arvind Parthiban, Naveen Venkat, and Santosh Kumar, Zarget is a one-stop website optimisation software that assists clients in A/B testing, heatmaps, funnel analysis, split URL testing, and form analytics.
Its services are geared towards helping clients understand how users interact with their websites. Zarget’s robust CRO tools are aimed at helping businesses increase orders, customer interactions and signups on their website.
Speaking about the rationale behind the acquisition, Zarget co-founder and CEO Arvind Parthiban told Inc42, “Freshworks wanted to get into marketing automation for a very long time and Zarget also wanted to evolve into a marketing automation player from a CRO product. Both our visions aligned and it made sense to merge and grow faster. The deal was too tempting to deny and it was a win-win for investors, founders, employees and Ffreshworks. So we took it.”
Since its establishment, Zarget has raised over $7.5 Mn in two funding rounds. In May 2016, the company secured $1.5 Mn in Seed funding from Accel Partners, Matrix Partners, and angel investors such as Girish Mathrubootham.
Later in November, the web optimisation and marketing platform raised $6 Mn in its Series A round of funding led by Sequoia India. Existing investors Accel Partners and Matrix Partners also participated in the round. In February 2017, Zarget announced the launch of the #RespectStartups initiative to help startups struggling to acquire funds buy licensed software products.
The Zarget platform currently services more than 1,450 customers spread across 30+ countries. Over 250 of these are paying customers including the likes of Buscape, Landesk, Carro, Freshdesk (now Freshworks), Voonik. As far as revenues are concerned, Zarget plans to hit $2 Mn in ARR by the end of this year. The team itself has now scaled to 85 members from 25 employees in May 2016.
Regarding the fate of the Zarget team and customers, post-acquisition, Arvind stated, “Zarget as a product will continue under Freshworks’ brand and we will continue to support our customers. We will add more features and release an extensive marketing automation software under Freshworks. More than 40 employees have joined Freshworks from Zarget, 15 of them have been placed in other companies and we are working with our investor portfolio companies to place the rest.”
Freshworks: Accelerating Growth Through Acquisitions
Launched in 2010 by Girish Mathrubootham and Shan Krishnasamy as a helpdesk software for customer support, Freshdesk was rebranded to Freshworks in June 2017. At present, the customer engagement SaaS solutions provider boasts a suite of SaaS products that includes Freshdesk, Freshservice, Freshcaller and Freshsales.
The company’s products and services are designed to enhance communication and collaboration between various teams and departments in a workplace. Headquartered in San Bruno, California, Freshworks is backed by Tiger Global Management, Accel Partners, Sequoia Capital India and CapitalG. In addition to India and the US, it has offices in Australia, Germany and the UK.
The business software startup boasts of more than 120,000 clients in over 145 countries. Freshworks has been especially busy the past couple of months. In July 2017, Freshworks acquired Joe Hukum, a platform that enables businesses to build their chatbots based on logical workflows.
Earlier in February 2017, the SaaS business software provider rolled out Freshdesk Marketplace, a new marketplace that allows customers to discover and install apps to help maximise their helpdesk capabilities.
A month prior to that, it acquired data integration platform Pipemonk, marking its seventh acquisition in the last 16 months – in tune with its strategy to create an ecosystem of interlinked Freshdesk and third-party products for businesses.
In November 2016, the Chennai-based SaaS startup also raised a $55 Mn Series F funding round led by Sequoia Capital India along with Accel Partners to fuel the company’s aggressive expansion strategy across the entire product line. Freshworks had earlier acquired Chatimity and Frilp, key acquisitions that are enhancing neuro-linguistic programming (NLP)-based artificial intelligence capabilities.
Its main rivals are US-based firms Zendesk and Salesforce. Other players specialising in business optimisation services include Optimizely, Wingify’s Visual Website Optimizer, Five Second Test, and Convert. With the Zarget acquisition, Freshdesk looks to aggressively capture the SaaS business software suite market in India.