Enterprise software is rarely exciting, but it provides the framework for doing things in the modern economy.
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Freshworks is in the business of business software. Originally hailing from Chennai, India but now headquartered in San Mateo, California, the company develops and offers a suite of applications, ranging from its flagship help desk software Freshdesk, to IT ticket tracking tools, call center management software, and more.
Today, Freshwork announced that received a commitment of $150 million for its Series H round which brings the company’s total funding to $399 million, according to Crunchbase data. The inside round was led by prior investors Sequoia Capital, CapitalG, and longtime backer Accel. According to a statement from Freshworks, the transaction is expected to close by the end of the year, following completion of closing requirements and approval by U.S. antitrust regulators.
The deal values Freshworks at $3.5 billion, post-money, up 133 percent from the $1.5 billion valuation the company earned following its $100 million Series G, closed a little over 15 months ago. Crunchbase News covered that deal at the time. In June 2018, the company hired Suresh Seshadri as its chief financial officer as it began solidifying plans to go public. With today’s funding announcement, Freshworks reaffirmed that it was on an “IPO track.”
Freshworks did not disclose additional information about its revenue. However, last year, CEO Girish Mathrubootham disclosed that the company had achieved an annual run rate of $100 million from over 150,000 customers. Earlier this week, Southeast Asia-focused tech publication YourStory reported that Freshworks now serves 220,000 clients, up nearly 47 percent from last year. Mathrubootham told Indian startup publication Inc42 that Freshworks now generates $200 million in ARR.
YourStory reported that Freshworks typically makes up the cost of acquiring a new customer after about 10 months of use, and that the average customer uses Freshworks software for four years. The publication also reports that the company earns about half of its revenue from mid-market and enterprise customers, with the remainder coming from small and medium-sized businesses.
The company’s path to IPO is long. The Times of India reported, back in July, that Freshworks aimed to go public on the Nasdaq as soon as 2021. The paper reported that the company is hiring for senior manager of SEC reporting, indicating the company’s intent to compose and eventually submit an S-1 registration statement.
In the meantime, though the company is intent on expanding its footprint in the U.S. and other global markets. Freshworks currently has over 2,500 employees in offices around the world, including in Australia, the U.K., Singapore, France, the Netherlands, and India.
Illustration: Li-Anne Dias