Freshworks, a US-based developer of customer relationship management (CRM) software, has filed for a $100m initial public offering that sets up a potential exit for internet and technology group Alphabet.
The offering is expected to be held later this year on the Nasdaq Global Select Market. Reuters reported in April that the company could potentially aim for a $10bn valuation through the IPO.
Founded as Freshdesk in 2010, Freshworks has built a range of enterprise software covering areas including customer experience, IT service management and CRM products.
More than 52,000 customers use Freshworks’ digital platforms, including payment technology producer Klarna and food delivery app provider Delivery Hero. Its revenue swelled to $169m for the six months ending June 2021, up from $111m in the same period the previous year.
The company also reported a $9.8m net loss for the first half of 2021, compared to $57.3m in the first six months of 2020. Investment firm Steadview Capital became a shareholder in the business by investing $85m through a secondary transaction in January 2020.
Freshworks had previously raised $400m of overall funding. Alphabet’s growth equity unit, CapitalG, joined Sequoia Capital and Accel to co-lead its $150m series H round in November 2019, valuing it at $3.5bn post-money.
CapitalG also participated in the company’s $100m series G round, which was co-led by Sequoia and Accel in 2018.
Freshworks had raised $50m in a 2015 series E round led by Tiger Global Management and backed by CapitalG and Accel. Those series E investors had already provided $31m of series D funding in 2014.
Tiger Global is Freshworks’ largest shareholder, with a 26.2% stake, followed by Accel (25.8%), Sequoia (12.3%) and CapitalG (8.3%).
Morgan Stanley, JP Morgan and BofA Securities are lead book-running managers for the offering while Jefferies and Barclays are book-running managers.
Baird, Canaccord Genuity, JMP Securities, Needham & Company, Nomura, Oppenheimer & Co, Piper Sandler Raymond James, Amerivet Securities, Castleoak Securities, Ramirez & Co and R Seelaus are co-managers for the IPO.