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Freshworks IPO: Breaking Down The Hype & Numbers

Don’t know why the Freshworks IPO was so hyped? Read this blog to find out if Freshworks is a good company and get a piece by piece breakdown of Freshworks’ IPO valuation.
October 11, 2021

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Freshworks Inc (ticker: FRSH) made the news after its successful Initial Public Offering (IPO) in the US. The Indian SaaS company raised a whopping $1.03 billion by selling 28.5 million common shares. 

Truth be told, it’s rare for an Indian company to be listed on a US stock exchange. In fact, being publicly traded is a rare phenomenon itself, regardless of what cheesy stock market ads on the TV tell you. 

For context, there are more than two million registered businesses in India. Less than 6000 of these companies are listed on Indian stock exchanges while only 15 trade in the US as per The Global Economy. 

Freshworks became the latest company to make that prestigious list. That’s why the Freshworks IPO was hyped, or… was it overhyped? Let’s figure that out with this blog.   

What Is Freshworks?

Freshworks Inc is a Software as a Service (SaaS) company that is known to provide customer experience and employee experience platforms for its users, who are primarily mid to large-sized companies.

The seeds for Freshworks Inc were sown in 2010 when founders Girish Mathrubootham (current Chairman & CEO) and Shan Krishnasamy (CTO) established Freshdesk, a cloud-based customer experience software. 

After multiple rounds of funding from giants like Tiger Global Management, smart acquisitions and a second product launch, Freshdesk was rebranded to Freshworks in 2017. 

Who Owns Freshworks?

There are multiple shareholders in Freshworks Inc, including public investors now that it has become publicly traded. Here’s a breakdown of Freshworks’ key shareholders by percentage.

  • Tiger Global (26%)
  • Accel India (25%)
  • Sequoia Capital (12%)
  • CapitalG (8%)
  • Girish Mathrubootham (7%)

Raising over a billion USD with shares tied to the FRSH stock through institutional and public investors was only possible due to the stellar and indeed popular Freshworks IPO. Let’s take a look at it in depth. 

Why Did Freshworks IPO Become Popular?

Freshworks Inc went public through an IPO in September 2021. The Indian SaaS company decided to go public in the US now that its HQ is in San Mateo, California.  

Furthermore, the Freshworks IPO price was set at $36 per share. The 28.5 million common shares up for grabs ended up generating $1.03 billion and ensured Freshworks was valued at over $12 billion. 

That’s not all. The Freshworks IPO valuation meant that 500 Freshworks employees became crorepatis overnight. Data suggests that 14% of the employees who became crorepatis were aged 30 or lower. 

The Freshworks IPO had other implications apart from the money generated. It meant that Freshworks became the 1st Indian SaaS company to be listed on the NASDAQ stock exchange in the US.

Finally, Freshworks stock (ticker: FRSH) debuted strongly on Nasdaq and ended its first day on the US exchange at $46.7, well over 20% of its IPO price of $36. 

Should You Invest In Freshworks Stock From India?

The Freshworks IPO was a success given the money raised and the shares sold. However, the SaaS company still has a mountain to climb when compared to its competitors like Salesforce, Oracle, and SAP.

Stock

Ticker

Market Capitalization (in USD billions)

Salesforce.com, Inc

CRM

266.758

Oracle Corporation

ORCL

258.033

SAP SE

SAP

160.113

Freshworks Inc

FRSH

11.983

Furthermore, Freshworks has logged only one profitable quarter (back in 2020) and currently has negative Earnings Per Share (EPS). But the surging Freshworks stock price indicates that investors are looking to the future. 

Moreover, Freshworks is an efficiently run organization that has churned out stellar earnings in a tough space. Given all of these variables, it’s best to consult a trained financial advisor before investing in the FRSH stock.

Hey! Did you know that you can invest in Freshworks stock (ticker: FRSH) from India using Cube. Tap this to know more!

Note:

Facts & figures are true as of 08-10-2021. All information mentioned is for educational purposes and relies on publicly available information. None of the information shared here is to be construed as investment advice. We strongly recommend you consult a Cube Wealth coach before investing your money in any stock, mutual fund. PMS or alternative asset.

Shriram Shekhar
Shriram is a Content Marketer at Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. Shriram’s love for philosophy, product development, and empowering people through quality content is what got him to Cube Wealth.

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