Just moments after ringing the bell at Nasdaq and taking his company public, Freshworks cofounder and CEO Girish Mathrubootham has said that high-quality talent, culture and the desire to build a global B2B tech platform from India have been the three cornerstones of the company’s journey from a startup to a publicly-listed $10 Bn SaaS giant. He added that the IPO, the first public listing by a B2B SaaS platform in the US, will be a turning point for the Indian startup ecosystem.
“When we started out as a small startup in Chennai, we didn’t even dream of this moment. Our first big dream was to get to a million dollars revenue. So I think we have made a lot of progress increasing the size and audacity of our dreams over the years,” Mathrubootham told Inc42 in a media interaction from New York. The company raised more than $1.03 Bn from its fresh issue, taking its valuation to $10.13 Bn.
Will IPO Change Freshworks?
Freshworks began with a mission to cater to smaller businesses and SMBs have been a major focus area for the company, but the first six months of 2021 have seen a 15% bump in the number of mid-market enterprise clients, as indicated by the share of customers that pay over $5,000 in annual recurring revenue (ARR).
As of December 2020, Freshworks had 11,570 customers, contributing more than $5,000 in ARR, which grew to 13,326, a spike of over 15% by June.
Mathrubootham added that the confidence of the mid-market enterprises in Freshworks has resulted in the company stepping up its outbound efforts towards this segment. But given the need to drive shareholder value, there may be a bigger focus on such customers in the near future.
Freshworks is getting pulled into mid-market companies due to the higher demand from these companies, but at the same time it will continue to focus on small and medium businesses. “We are not abandoning SMBs and in fact, that is our core strength and Freshworks’ DNA. Everything that we do is based on our strong understanding of the online buyer, which 90% of the time is an SMB (less than 250 employees).”
Freshworks’ Talent & Culture Advantage
Like its focus on SMBs, Freshworks’ culture will remain resilient even after the IPO, Mathrubootham insisted. He said the company will remain steadfast on the same ‘kudumba’ values that have taken it this far, with 13 offices all over the world. The CEO stressed that while Freshworks is a tech company, the culture is driven by the concept of ‘kudumba’, which is family or home. “I am super proud that we are able to bring the concepts of our culture and make this internationally known — everything from Tamil roots to SuperStar (Rajinikanth), as you have seen in our S-1 filing.”
According to him, Freshworks had the unique strategic advantage of access to top talent in India, across Chennai, Bengaluru and Hyderabad, which allowed Freshworks to create products at a faster pace and drive innovation.
“The other important advantage that India brings for us professionals is the ability to service the long tail of the global SMB customer from India like everything from demand generation to support happens from India and that 100% of the business goes from India, that is the software business model that India offers.”
From Startup To Wealth Creator
And this talent base has been rewarded in the current IPO. More than 500 of its employees are now ‘crorepatis’, said Mathrubootham, adding that the IPO is his opportunity as a CEO to fulfil the responsibility to current and past employees who believed in Freshworks over the last 10 years. A whopping 76% of the company’s employees own shares, and that figure has fallen due to the ramped-up hiring in the past year.
“I think this is truly something that India needs to do more of, and I personally believe it is well deserved. They all earned it. Because as Freshworks grew, all these employees have actually contributed to that and I truly believe that wealth has to be shared with the people who create, it is not just for founders or investors.”
‘India’s Moment In The Tech World’
The CEO said that it’s a proud moment for him that Freshworks is the first B2B software company from India to go public in the US, adding that it is a Roger Bannister moment for Indian startups, referring to the first athlete who ran a mile under four minutes.
“And then immediately the year after that, several athletes broke that record, but before that for 100 years, nobody had done it. So I am super excited about what this means for India, like we have the whole next set of entrepreneurs and founders who are building companies that are scaling nicely, and we all share this dream of India as a product nation.”
Mathrubootham, who is referred to as the ‘Thalaiva’ (leader) of Indian SaaS, said he had always wanted to build a global product company from India and is excited to see the next set of companies go public.