Girish Mathrubootham, CEO and founder of Freshworks, awaits his company’s IPO
Freshworks
Girish Mathrubootham started small. That didn’t last long. Four days after launching Freshworks, his customer service platform in October 2010 from an air conditioning duct warehouse in Chennai, a metropolis in the South of India, and staffed with a team of six rockstar programmers, his startup was instantly international. Atwell College, a public high school in Perth, Australia, nearly four thousand miles away, spent a couple of hours poking around the platform Mathrubootham envisioned as an empowering customer experience, and signed on as the first Freshworks customer.
Within 200 days—and no outside funding—Freshworks had 200 small and medium business customers spread across the globe. Venture capital firms such as Accel, Tiger Global and Sequoia Capital caught wind of the startup’s steep trajectory and in 2018, Freshworks raised $100 million in Series G funding, hitting a $1.5 billion valuation and becoming India’s first enterprise tech unicorn. Now, in a week packed with public offerings, the Freshbook IPO is the most hotly anticipated, having raised $1.03 billion and joining Nasdaq on Wednesday with a $10.13 billion valuation. The company has priced 28.5 million shares at $36 per share.
“If you asked me, did we know that we are going to go public in the U.S. or we will become this successful, I would have said absolutely no,” Mathrubootham, 46, tells Forbes. Now headquartered in San Mateo, California, Freshworks serves 50,000 customers in 120 countries. It’s expanded offerings explain excitement around its IPO. Along with turn-key customer service software, the four-time list maker on the Forbes Cloud 100 offers a full suite of enterprise tech software tools supporting sales, productivity, marketing, human resources and IT.
“Our mission is very clear,” Mathrubootham says. “We want to make it fast and easy for every business to delight their customers and their employees.” As Freshworks enters what the company estimates as a $120 million market, it faces heavyweight competition. Key rival Salesforce generates $21 billion in annual revenue. Zendesk, Oracle, Atlassian and Microsoft are also in the mix. Mathrubootham doesn’t fear the competition. “We truly believe that the world of CRM (customer relationship management technology) needs a refresh, pun intended. Plus, it’s a huge market,” he says.
It’s a huge step for an Indian enterprise software company to go public in the U.S., says Shekhar Kirani, a partner at Accel, one of the initial investors in Freshworks. “When Freshworks started there were no other global SaaS tech companies out of India and no mainstream investors were excited,” says Kirani, who loved the product Girish and team had built and invested $1 million funding in 2011. Freshworks now shares the India startup spotlight with 100 unicorns, according to Credit Suisse. The country is currently experiencing a tech boom, and Indian food delivery startup Zomato only increased the investing frenzy when its shares jumped over 80% during its market debut in July.
Times have changed since Freshworks’ zero-funding days in the air conditioner duct warehouse. “Our grouping goal in 2011, when we launched our first product, Freshdesk, was to try and get to $1 million revenue.” In the first six months of 2021, Freshworks reported $168.9 in revenue and a loss of $9.8 million, compared with $110.5 million and a loss of $57.1 million for the same period in 2020. Freshworks has grown from six employees to more than 4,000 employees, with 80% working out of India.
Mathrubootham spent 10 years at Indian web-based tools company Zoho, rising to the rank of vice president of product management, but he was inspired to launch Freshworks following an unfortunately familiar bad customer service experience. He sought to fix that widely shared bad experience by developing and providing easy to use software that facilitates better customer engagement. “We truly believe that the world of CRM needs a refresh, pun intended,” he says.
From that idea to Wednesday’s IPO, Mathrubootham hit a few rough patches. He recalls that one of the tougher phases for him as a CEO was in 2015 when he was still trying to manage every front of his booming business, including customer calls and negotiating discounts. “So that’s when I decided I need to build a management team,” he says, adding that struggle was integral to building the product and dreaming big. “I am a believer that startups actually get creative when there are constraints. I don’t think if I started Freshworks today all over again, we probably may not be even successful.”
“We wanted to show that world-class products can come from India,” Mathrubootham remembers. Now, he is confident that this company’s products qualify among the best in the world and proud that Freshworks is setting an example for India’s emerging enterprise software startups. “Our IPO is giving a lot of hope to founders,” he says. “As a country, I think we all believe that SasS is the next big opportunity for India.”
