Software-as-a-service (SaaS) unicorn Freshworks Inc. is ramping up its US operations amid news reports that it was planning to list on New York-headquartered stock exchange, Nasdaq, by 2021.
The Chennai- and California-based startup sees opportunities in the buoyant small and medium-sized business (SMB) and mid-market segments in the US, which are looking at customized solutions, Freshworks’ chief marketing officer David Thompson said in an interview.
In August 2018, Mint had reported that Freshworks may opt for an IPO. Last week, Freshworks announced the opening of its Denver office, its second in the US, and said it will hire more than 100 sales and solution engineers. While the bulk of its 2,500-strong workforce is in India, it plans to grow the headcount in the US. Thompson said the firm is targeting growing its demand and is also looking at acquisitions to enhance its offerings. “The US headquarters has about 200 people right now, growing very quickly to 300 people soon," he added. More than 2,000 Freshworks employees work out of Chennai. It also has offices in Bengaluru and Hyderabad.
On the company’s listing plans in the US, Thompson said: “...That’s just a part of the fundraising process. We’re going to do what’s right for the business, we’re going to invest, as our customers need us to invest in the business. So, if IPO is the right way to go at the right time, we’ll look at that." “We’re expanding very rapidly and will look at financing opportunities as they come along." A significant portion of Freshworks’ revenue comes from SMBs. Thompson said a recent study, on competitors, such as Salesforce and Microsoft, conducted in the US, the UK and Germany, in partnership with Forrester Consulting, revealed that almost 70% of small businesses and mid-market enterprises plan to change their customer relationship management (CRM) software within the next two years.
“Smaller customers have a hard time dealing with the complexity (of legacy SaaS software) and get easily frustrated by the experience and price tag. So, they’re looking for a fresh solution. There’s just so much of that opportunity, both in net new customer acquisitions, as well as for those converting."
Freshworks is also collaborating with IIT Madras on artificial intelligence (AI) to improve its business software. “Our head of engineering is working very closely with the AI department of IIT Madras, where some of the most advanced research in the world is happening. We want to show our customers that when you are coming to us, you’re getting the bleeding edge technology."
It is also working with Amazon Web Services to leverage their AI algorithms. Freshworks recently acquired Natero, a customer success management software firm. “We’re at a stage where our tech stack is very mature, but also very open. So we’re looking for companies that are very compatible with that tech stack," Thompson said.