Banking

Freshworks IPO Has Blockbuster Potential In Hot Software Market

Freshworks (FRSH) has set the stage for one of the largest initial public offerings this year. The IPO could raise $970 million at the top end of its price range, giving the cloud software company a valuation near $9.6 billion. The Freshworks IPO will price Tuesday and trade Wednesday.




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The company provides a cloud-based customer service and support software platform that competes against Salesforce.com (CRM). It serves about 52,500 businesses, according to the Freshworks IPO filing.

The San Mateo, Calif.-based company is offering 28.5 million shares in the range of $32 to $34 a share. That’s up from a previous price range of $28 to $32. That suggests strong interest in the Freshworks IPO from institutional investors. IPO research and advisory firm IPO Boutique, said the Freshworks IPO “is likely on track for an excellent debut.”

Freshworks uses a software-as-a-service business model, offering products under free and paid subscription plans. The products are used by small companies up to large business enterprises.

Inside The Freshworks IPO Filing

In the Freshworks IPO filing, the company claims that the first generation on SaaS business software has become “too fragmented, unwieldy, and expensive, making it inaccessible for a wide swath of businesses.”

Freshworks says it offers “a more complete customer relationship management (CRM) solution, which includes sales force and marketing automation.”

For the six-month period ended June 30, Freshworks generated revenue of $168.9 million, up 53% from the year-earlier period. It showed a net loss of $9.8 million, compared with a loss of $57.1 million in the year-ago period.

Freshworks began in a 700-square-foot warehouse in India in 2010.

A Big Year For IPOs

As the traditional summer break ends, initial public offerings are stampeding ahead, already making 2021 one of the biggest years ever in terms of proceeds raised, led by the tech IPO field.

Thus far this year, IPOs in the U.S. have raised $100.5 billion. Total proceeds could shatter the record set in 2000 by about 30%, according to Renaissance Capital.

“The U.S. IPO market has already posted its busiest year since the internet bubble in 2000, and we expect issuance to stay active in the fall,” Renaissance Capital said in a posting on its website.

Salesforce.com stock dipped a fraction, near 258.20, in afternoon trading on the stock market today.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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