The stock was trading as high as $46.67 per share in early trading on Wednesday, nearly 30% higher than the listing price of $36. Freshworks’ IPO consists of the issuance of 28.5 million shares (Class A stock) at $36 per share. Due to positive sentiment, the IPO price was set above the expected price range of $32 to $34 per share earlier on Wednesday.
with this, freshworks has given underwriters a 30-day option to purchase an additional 2.85 million shares of Class A common stock at a minimum underwriting discount and commission on the IPO price.
“When we started in Chennai in 2011, we didn’t dream of it… We have grown the audacity of our dreams over time. I am excited about what this means for the Indian mother-in-law and I believe We are going to see more global product companies from India after this,” Freshworks founder Girish Mathrubootham said at a press conference on Wednesday.
He said the IPO gives him a greater sense of fulfillment because more than 76 percent of Freshworks employees own shares in the company and have earned it. “More than 500 of our employees in India are now millionaires, and 70 of them are under the age of 30,” he said. Mathrubhumi along with his family and a large “kudumba” of FreshWorks employees and investors rang the bell on the Nasdaq trading floor on Wednesday.
Freshworks intends to use the net income, including working capital, operating expenses and capex, for general corporate purposes and to scout for inorganic opportunities.
As a founder-led business that is free cash flow positive, minimizes its losses and is known to have a great corporate culture, the SaaS firm has received a thumbs-up from most SaaS and market analysts. Snowflake, Asana and Zoom are some of the recent SaaS giants that have performed well in the US markets.
Interestingly, FreshWorks’ dollar-based net revenue retention, a measure of customer stickiness, is 118%, which is a huge plus for a company that sees small and medium-sized businesses as its largest customer category. counts.
The major shareholders of FreshWorks are Tiger Global and Accel India, which hold approximately 26% and 25% ownership respectively. Accel was the first investor to back FreshWorks and has backed the company in successive rounds. VC firm Sequoia Capital holds a 12% stake in FreshWorks, founder Matribootham holds about 7% and Google has an 8% stake.
Freshworks CFO Tyler Slott said it’s natural for VCs to drop out over time, but the current set of VC investors are extremely excited about what FreshWorks can do in the future.
“[It’s an] Wonderful day to all the founders around the world to dream big and make that dream come true. Congratulations FRSH. Great to partner with @mrgirish from day one of this company. Go @Accel_India,” tweeted Shekhar Kirani of Accel India, the first institutional backer of FreshWorks.
“We are fortunate to partner with Accel, Tiger Global and Capital G in this industry-defining company. Having led or co-led three financing rounds, our investment in FreshWorks represents Sequoia India’s largest investment from its India/SEA fund,” Sequoia’s Mohit Bhatnagar and Karl Eschenbach said in a note.
Freshworks is headquartered in San Mateo, California, but most of its product and engineering staff are based in Chennai. Cognizant and Sify Technologies are other tech companies with a large presence in Chennai and listed on Nasdaq.
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