Chennai-headquartered SaaS unicorn Freshworks is reportedly looking to raise a fresh round of funding, ahead of its plans for a public listing.
An ET report said that Freshworks is in talks with existing investors like Sequoia Capital India and Tiger Global Management as well as new investors, including mutual funds to lead a fresh funding round. Even though the discussions are said to be in the early stages, the company is reportedly looking at a valuation of $2.5 Bn-$3 Bn.
To date, the company has raised $250 Mn from marquee investors such as Tiger Global and Sequoia.
Freshdesk was launched in 2010 by Girish Mathrubootham and Shan Krishnasamyas a helpdesk software for customer support and was rebranded to Freshworks in June 2017. It claims to have over 150K clients worldwide using the Freshworks software product suites, including leading companies such as the NHS, Honda, Rightmove, Hugo Boss, Citizens Advice, Toshiba, and Cisco, among others.
Earlier this year, the company said it has 35K paying customers and its billings in the April-June quarter have increased by 69%. Last year, the company also reached $100 Mn ARR and launched a suite of services— Freshworks360.
Inc42 had analysed earlier that Freshworks’ growth has been supported by strong financials, an acquisition-led growth strategy and bundled a suite of services with individual products.
In July, Freshworks was reported to be planning an initial public offering (IPO) by 2021. The listing is expected to be on New York-headquartered stock exchange, NASDAQ. The company is also working to create increased awareness of its brand in the US and details of its vast customer.
It was reported that Freshworks CEO Girish Mathrubootham has relocated to the US. This was expected to keep in close touch with US headquarters in California as he now spends most of his time in the US market, closer to consumers and other stakeholders.
As a SaaS unicorn, Freshworks directly competes with majors such as Zoho and Icertis. According to NASSCOM, India’s software as a service (SaaS) market is expected to grow 36% annually and touch $3.3-$3.4 Bn by 2022.
This growth is expected because of a cheaper workforce, abundant talent, mature sales ecosystem, and adoption of deeptech technologies in the country. According to DataLabs by Inc42, enterprise tech startups raised $3.01 Bn across 742 deals between 2014 and H1 2019.