Chennai startup to be listed on NASDAQ soon, plans to raise $ 912 million through public offering

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Renowned global investors hold a stake in Freshworks ahead of the IPO. Accel, Tiger Global Management, CapitalG and Sequoia Capital India are among the investors of Freshworks.

Freshworks, a Silicon Valley-based software as a service (SaaS) startup, is seeking to raise $ 912 million from its initial public offering (IPO) on Wall Street. Launched in Chennai, Freshworks moved to the United States to be closer to its customers, but still maintains a strong presence in South India. The company will propose to sell 28.5 million Class A common shares at a fixed price of $ 28 and $ 32 per share. After the successful IPO, the company is listed on NASDAQ under the symbol FRSH.

At the high end of the price bracket the company will raise $ 912 million while at the lower end the amount raised will be $ 798 million. Reports suggest that Freshworks is seeking a valuation of nearly $ 9 billion, significantly higher than the valuation of $ 3.5 billion it was given in the previous funding round in 2019. Freshworks will join companies such as Yatra Online , Azure Power and the most recent ReNew. Power listed on NASDAQ via a SPAC.

“We have two authorized classes of ordinary shares: class A ordinary shares and class B ordinary shares. which concerns voting and conversion. Each Class A ordinary share carries the right to one vote. Each Class B ordinary share carries the right to 10 votes and is convertible at any time into one Class A ordinary share, ”Freshworks said in its IPO filing. The company added that the outstanding Class B common shares will represent approximately 98.9% of the voting rights of its outstanding share capital immediately after the IPO. Of this number, directors, officers and principal shareholders represent approximately 78.3%.

The company plans to use the funds raised from the IPO for general corporate purposes, including working capital, operating expenses and capital expenses. “We may also use a portion of the net proceeds for acquisitions or strategic investments in complementary businesses, products, services or technologies. However, we do not have any agreements or commitments to complete such acquisitions or investments at this time, ”said Freshworks.

Renowned global investors hold a stake in Freshworks ahead of the IPO. Accel, Tiger Global Management, CapitalG and Sequoia Capital India are among the investors of Freshworks. Although Freshworks is still a loss making entity, it has seen strong revenue growth while reducing losses. In the six months ending June 2021, the company achieved revenue of $ 168.92 million, compared to $ 110.47 million in the same period last year. Net losses were reduced to $ 9.8 million from $ 57 million a year ago.

Wall Street has seen a large number of initial public offerings since the onset of the post-pandemic bull run and a significant number of them were tech companies.

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