Bengaluru: Chennai and California-based Freshworks Inc. is ramping up its US operations amidst reports of a possible initial public offering (IPO) in the next two years or so. The software-as-a-service (SaaS) unicorn sees opportunities in the buoyant small and medium business (SMB) and mid-market segments in the US, that are looking for customized solutions, according to a top official.
Last week, Freshworks announced the opening of its second US office in Denver and said it would hire over 100 sales and solution engineers. While the majority of its 2,500-strong employee base is in India, the company is looking to increase its headcount in the US. Freshworks’ chief marketing officer David Thompson, in an interview said that the customer engagement software company is looking to cater to the growing demand from the SMB and enterprise segments in the US and is also looking for acquisitions that will enhance its offerings.
“The US headquarters has about 200 people right now, growing very quickly to 300 people soon,” he said. More than 2,000 Freshworks employees work out of Chennai, and it has offices in Bengaluru and Hyderabad.
A significant portion of Freshworks’ revenue comes from small and medium businesses. Referring to a recent study conducted in the US, UK and Germany by Freshworks and Forrester Research of the former’s competitors such as Salesforce and Microsoft, Thompson said the study revealed that almost 70% of small businesses and mid-market enterprises are thinking of changing their CRM software in the next two years.
“Smaller customers have a really hard time dealing with the complexity (of legacy SaaS software) and get easily frustrated by the experience and the price tag. And so they’re looking for a fresh solution. There’s just so much of that opportunity, both in net new customer acquisitions who haven’t been in the cloud before, as well as those converting,” he said.
The company also plans to educate customers about the innovation and cutting-edge research that’s happening in India. It is working with IIT Madras to leverage artificial intelligence (AI) to improve its business software.
“Our head of engineering is working very closely with the AI department at IIT Madras, where some of the most advanced research in the world is happening. We want to show our customers that when you are coming to us, you’re getting the bleeding edge technology,” he said.
On recent reports of a possible IPO listing in US, Thompson said, “…That’s just a part of the fundraising process. We’re going to do what’s right for the business, we’re going to invest as our customers need us to invest in the business. So if IPO is the right way to go at the right time, we’ll look at that,” he said.
We’re just growing our business. We’re expanding very rapidly and will look at financing opportunities as they come along,” Thompson added.
Freshworks is also collaborating closely with Amazon Web Services to leverage some of their AI algorithms. The company recently acquired Natero, a customer success management software company, which marked its tenth acquisition.
“We’re at a stage where our tech stack is very mature, but also very open. So we’re looking for companies that are very compatible with that tech stack. We’re focused on finding synergies that can have immediate impact and can be immediately integrated with the customer experience, like Natero,” he said.
Freshworks’ business is a “good healthy distribution between Europe and US,” he said, adding that India is their third largest market. “We’ve got offices in Australia, just opened one in relationship with a partner in Japan, an office in Singapore, and a small presence in the Middle East. The opportunity is very, very global.”