Freshworks’ Nasdaq listing echoes in India’s startup ecosystem

Freshworks Inc., a company that the former Zoho employee cofounded in 2010, has become the first Indian software-as-a-service (SaaS) startup
to list on the Nasdaq, opening the doors—in a way—for others of its ilk to take Indian software enterprise to the world. This after the San Mateo-based company
raised over a billion dollars in an initial public offering (IPO) at a market capitalisation of 10 times as much.

“Today is a dream come true for me—from humble beginnings in Trichy (Tiruchirappalli) to ringing the bell at Nasdaq for the Freshworks IPO,” Mathrubootham tweeted after ‘FRSH’ debuted on the second largest stock exchange in the world. “Thank you to our employees, customers, partners, and investors for believing in this dream.”

His peers—entrepreneurs and investors alike—joined him in marking the milestone.

“We are fortunate to be partners in this industry-defining company, along with Accel, Tiger Global and CapitalG,” Sequoia’s Mohit Bhatnagar and Carl Eschenbach
wrote in a blog. “Having led or co-led three financing rounds, our investment in Freshworks represents Sequoia India’s single largest investment from its India/SEA funds.”

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Freshworks has become the first Indian software products company to list on Nasdaq, raising more than $1.03 billion from investors through its initial public offering at a market cap of $10.13 billion.

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According to the shareholding pattern in Freshworks’ IPO papers filed with the United States Securities and Exchange Commission (US SEC), Sequoia Capital holds a 12.1% stake in the software maker. Tiger Global and Accel account for a quarter each while Alphabet Inc.’s independent growth fund Capital G has 8.2% stake.

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“Amazing day for all the founders across the globe in dreaming big and executing towards that dream,” Shekhar Kirani of Accel India tweeted. “Congrats FRSH. Great to have partnered with @mrgirish from Day 1 of this company.”

Up until now, India’s tech exports have largely been associated with offshore outsourcing and IT services, Accel’s Sameer Gandhi and Shekhar Kirani
wrote in a blog. However, with an immense pool of engineering and product talent and an aspirational eye to entrepreneurship, India is a region that can also be the founding ground for world-class technology product companies, they said.

“Today, Freshworks is the torch-bearer as the first SaaS company of Indian origin to list on a US exchange. We are eager to see who will now follow, and from where they may emerge.”