Freshworks, a US-based customer relationship management (CRM) software developer backed by internet and technology group Alphabet, raised $1.03bn in an initial public offering on the Nasdaq Global Select Market on Tuesday.
The company priced 28.5 million shares at $36 each, above the $32 to $34 range set for the offering. Its shares closed at $47.55 yesterday, equating to a market capitalisation of $13.5bn.
Founded in India, Freshworks produces a variety of software used by companies for CRM, customer experience and IT service management processes. More than 52,000 businesses use its software-as-a-service products.
Freshworks reported $169m of revenue and a $9.8m net loss for the six months ending June 2021, compared to $111m and $57.1m over the same period the year before. It had raised $400m in funding prior to the offering.
CapitalG, the growth equity arm of Alphabet, joined Accel to co-lead a $150m series H round for Freshworks in November 2019, the former having also backed a $100m series G round in 2018 that was co-led by Sequoia Capital and Accel.
The company, then known as Freshdesk, received $50m in its 2015 series E round, which was led by Tiger Global Management and which also featured CapitalG and Accel. The series E investors had previously taken part in Freshworks’ $31m series D round in 2014.
CapitalG’s 8.2% stake in Freshworks was diluted to 7.3% while Tiger Global came out with a 23.1% stake, Accel 22.7% and Sequoia Capital 10.8%.
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, Wolfe | Nomura Strategic Alliance, Oppenheimer, Piper Sandler, Raymond James, AmeriVet Securities, CastleOak Securities, Ramirez and R Seelaus are co-managers for the IPO.
The offering includes a 30-day option allowing the underwriters to purchase an additional 2.9 million shares which could increase its size to approximately $1.13bn.