Ahead of a possible initial public offering (IPO) in the U.S next year, the India arm of software-as-a-service (SaaS) unicorn Freshworks Inc. has reported net profit of ₹30 crore on a standalone basis for the year ended 31 March, 2019.
This is a 76% increase from ₹17 crore net profit in 2017-18.
For the 2018-19 fiscal, Freshworks Technologies Pvt Ltd clocked revenue of ₹404.7 crore, 59% up from ₹254 crore in the year-ago period, according to data accessed by business intelligence platform, Tofler.
The company’s total expenses for the period was ₹364 crore, up 61% from ₹226 crore in the previous fiscal, on higher employee benefit expenses.
Freshworks turned profitable in FY18. It is now the second unicorn (startups valued at a billion dollars) to report profits after ed-tech company, Byju's.
In November, 2019, the Chennai- and California-based company raised $150 million in a series H funding round led by Sequoia Capital, CapitalG, and Accel, at a valuation of $3.5 billion. Over the past year, the company acquired two US-based firms - artificial intelligence (AI) startup AnsweriQ Inc, and customer success management software company, Natero, Inc. Freshworks has more than 2,700 employees across 13 offices around the world.
Freshworks is also one of the growing number of successful SaaS companies in the country alongside firms such as Zoho, Druva, Clevertap and Kaleyra. Funding activity in SaaS has been on a high lately, and it recently crossed the $1 billion mark in 2019.
Industry observers also point out that SaaS companies have a better path to profitability and market reach compared to tech firms in the consumer Internet segment. Hence SaaS brands are increasingly becoming attractive to several existing Internet venture capital firms.
An e-mailed statement from Freshworks said: "We are a global company headquartered in San Mateo, California (USA). With our subsidiaries in UK, Europe, India and Australia, we realise revenue from business operations across these regions. The financial information reported publicly via regulatory disclosures in a particular region does not accurately reflect the overall performance of the company. As a private company, we do not disclose our global consolidated financials at this time."