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BENGALURU : Freshworks Inc. created history last month by becoming the first software-as-a-service (SaaS) startup from India to list on Nasdaq, making it one of the proudest moments for the Indian startup ecosystem. The company raised more than $1 billion through its public offering, giving it a more than four-fold rise in its valuation at a little more than $13 billion (about 97,790 crore).

Freshworks founder Girish Mathrubootham spoke with Mint about the milestone he calls “India’s IPO" and his inspiration from Steve Jobs, even as he explains what Freshworks did right and the future direction of the software startup. Edited excerpts:

 

How is Freshworks adapting to governance and financial nuances, now that it is a listed company?

At Freshworks, we have been practising life as a public company for 12-18 months. I would say this was a journey, to make sure that we are execution ready and operations ready. When we say operations ready, it means whether Freshworks has all the back-office systems and processes in place to close the books. Execution ready is whether we have the (business) predictability to provide right guidance for every quarter, every year, and so on.

I’m actually feeling energized and humbled by the response to our initial public offering (IPO) and it was truly India celebrating. The Freshworks IPO is India’s IPO. The bigger feeling is of excitement. Pressure is always a privilege. Everyone has a high expectation (of us) and we have to deliver that now.

Prominent venture capitalists have backed you. How was their response on exits? How do you see value creation for public market investors?

I think the IPO has given me the opportunity to fulfil my set of responsibilities to venture capital investors who came with us on this journey starting in 2011. Now, as I take on the role of chief executive officer, I take the responsibility for creating value for a new set of public market investors. Our employees are also shareholders and not different from public market investors.

On exits, most of this is public. For Accel and Tiger Global, we have possibly clocked the largest value of returns, bigger than Flipkart as well. For them, we are the top investment in India (by returns). Our investors are supremely happy.

Now, with the IPO-milestone out of the way, what are the next key priorities for Freshworks?

We look at Freshworks as two broad units, a customer line of business and an employee line of business. With technology evolving, businesses have made investments in siloed tools of customer service, sales customer relationship management (CRM), and marketing automation. We are on this journey to break down these silos and offer an omnichannel solution.

Our mission at Freshworks is to make it fast and easy for every business to delight their customers and employees. That does not change.

We want to build a different kind of software company where we take inspiration from (Apple Inc. co-founder) Steve Jobs, and say it is not about building features but really about focusing on design to make life easier for users. That is the ethos on which our products are built.

We have seen Freshworks cut losses dramatically. Is there guidance on your profitability?

The answer to growth versus profitability is always to look at it as a balance. If we can grow efficiently, we will continue to grow. There is no need to go for profitability just because we must be profitable.

So as long as we can grow efficiently, north of 30%, we will continue to grow. And if we feel that spending on incremental growth is not going to be efficient, we will probably not waste those dollars. Our approach is to be sustainable, and we operate by a performance-led model.

What about acquisitions and international growth?

We have customers in more than 120 countries. For our outbound sales teams, we do not have a presence in Latin America or parts of Asia. We will look at markets where we can grow deeper and may open a couple of offices. But there are no concrete plans as of now. We can go deeper in Europe where we can increase the breadth of coverage of our products.

From an acquisition perspective, we don’t have to acquire for growth. We will be choosy to acquire, and look at a great team and technology for acquisitions. We don’t want to acquire for revenue since Freshworks is growing at a healthy pace.

When you look back, what are some of the things you feel Freshworks did right?

Our decision to build, to start in India, and go global with our first product-led growth model when people weren’t even talking about product-led growth. Today, product-led growth is a buzzword, and since 2011 we have been doing exactly that -- building the disruptive business model for our first product, betting on going multi-product, and not just relying on Freshdesk but going multi-product. Then we proceeded to augment and do an outbound (sales) engine so we get tractopm with more mid-market customers. I think we got those fundamental blocks right and I wouldn't change any of that.

With SaaSBooMi and Together Fund, how are you looking to give back further to the Indian startup ecosystem?

My job as CEO of Freshworks allows me to help and openly share with founders on the mistakes we may have made. If it had not been for Freshworks nobody would have listened to me right.

With SaaSBooMi, we are creating a community of founders who are helping each other, and sharing operational knowledge so that the next Freshworks from India doesn’t take eleven years to reach where we have reached. They can probably reach there in six to seven years, and not repeat the same mistakes.

It is linked to the dream of making India a ‘product nation’ and Together Fund is also a part of the same dream. With Together Fund, we get the ability to back 20 or 30 world class teams, and give them contextual help with mentors around the world. We have close to 160 founders who are today a part of the Together network.

We have to deliver on the dream of India being a product nation and have hundreds of product companies in India, who are creating massive employment, and wealth creation for employees and shareholders.

In the next decade, we have to show the world that world class products can be built from India.

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