Freshworks jumps 36% in trading debut after pricing IPO at $36 per share

A Freshworks Inc logo is seen on a smartphone screen.
  • Shares of Indian software firm Freshworks jumped as much as 36% in their trading debut on Wednesday.
  • The firm priced its initial public offering at $36 per share Tuesday evening.
  • Freshworks aims to compete with Salesforce as it tries to disrupt the customer relationship management market.
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Shares of Freshworks jumped as much as 36% on Wednesday during its Nasdaq debut.

The stock hit an intraday high of $48.75 Wednesday. Freshworks on Nasdaq trades under the ticker “FRSH.”

The firm priced its initial public offering at $36 per share Tuesday evening. Freshworks sold 28.5 million common shares, raising $1 billion in proceeds and garnering a valuation of over $10 billion valuation.

Founded in India, Freshworks, now a San Mateo, California-based software company, builds customer management platforms that have gained the attention of clients including Honda, Cisco, and American Express.

Its business boomed during the pandemic as companies rushed to digitize most of their customer operations to cater to the growing demand of clients whose employees were mostly stuck at home as large swathes of the world shutdown, founder CEO and Girish Mathrubootham previously told Insider.

Freshworks aims to compete with software behemoth Salesforce as it tries to disrupt the customer relationship management market, Mathrubootham added.

Though Freshworks is based in the US, the majority of its employees are based in Chennai, India. It has other offices in 10 other locations, including London, Berlin, and Sydney.

The idea of Freshworks was borne out of Mathrubootham’s frustration with the lack of response from a moving company, which damaged his television during the process in 2010. More than a decade later, he has grown his firm from just focusing on customer support to one that provides software for every customer interaction.

“We started in a 700 square foot warehouse in Chennai in 2010,” Mathrubootham said in the regulatory filing. “We didn’t plan nor expect to change the world. Our dreams came in increments, each building on the next and expanding our vision over time.”

Today, the company, among India’s first unicorns – startups worth more than $1 billion – and is one of the country’s best-known software-as-a-service firms.

Morgan Stanley, JPMorgan, and Bank of America Securities acted as lead book-runners for the offering.

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What is SaaS? Understanding the distribution method companies use to host software on the internet

Windows laptop
You more than likely interact with SaaS, or Software as a Service, in your daily work.

  • SaaS is a distribution model for software licensing that lets companies host their software on the internet.
  • Users don’t have to download anything to their device to access the software.
  • SaaS platforms come in two forms: verticals and horizontals.
  • Visit Insider’s Tech Reference library for more stories.

Depending on what you do and who you talk to, you’ve either never heard of SaaS, or you’ve seen the term thrown around as though you were supposed to understand what that meant without any context. We’re here to make sure you’re in the know the next time it pops up.

What is SaaS?

The gist is this: SaaS (Software as a Service) is a distribution model for software licensing where the provider hosts applications on the internet (or makes them available through a website), so that users don’t have to download anything onto their computers to access the software. (SaaS falls under the cloud application umbrella.)

Even if you’re unfamiliar with SaaS, you’ve probably used a service that uses this model. In fact, it’s becoming so popular that one survey found 86% of organizations expected most of their software needs to be met by SaaS by 2022.

Here’s what else you should know about SaaS.

Types of SaaS

There are two main types of Saas.

  • Verical: These focus on the needs of a single industry. For example, Clio only addresses law firms.
  • Horizontal: These work across several industries. Quickbooks, for instance, lets users do bookkeeping regardless of their profession.

While both are using the same distribution model, the difference lies in how they serve their customers (and who those customers are.)

Advantages and disadvantages of SaaS

As with anything, there are pros and cons to making the switch to a SaaS platform.

Advantages

  • It elimates the need for hardware maintenance and associated costs.
  • It could translate to savings on IT costs (one study found companies saved an average of 15% in this area).
  • Data is available through a centralized platform, so it’s easier to access.
  • It’s usually faster to implement updates and changes since there isn’t hardware involved.
  • It eliminates the needs for software updates on the user side.

Disadvantages

  • Customers no longer have the option to stick with an older version of the software if they prefer it.
  • Potential for software-integration problems when switching to a SaaS model.
  • In the event of a data breach, the company (not the cloud vendor) is on the hook and may face legal consequences.
  • Customers may prefer a one-time fee pay structure, rather than the more typical monthly fee option available from many SaaS companies.
  • Slow internet speeds affect the software’s performance.

Examples of SaaS

You’ve probably already heard of, if not used, a SaaS platform. For reference, here are a few examples of popular SaaS companies.

  • Google Drive: Lets you create documents, presentations, spreadsheets, and forms that automatically update.
  • Dropbox: Acts as a file-hosting service so users can easily share files and back up their work.
  • Salesforce: Focuses on ​​customer relationship management.
  • DocuSign: Allows you to easily exchange and sign documents.
  • Slack: Lets workers communicate with each other through direct messages.

A guide to cloud computing, the multibillion-dollar industry that powers your favorite appsWhat is a cloud application? Here’s everything you need to know about the internet-based softwareWhat is software? A guide to all of the different types of programs and applications that tell computers what to doWhat is malware? Everything you need to know about malicious software and viruses, and how to protect your computer

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Adobe’s chief product officer predicts the 8 biggest tech trends of 2021

Scott Belsky
Scott Belsky.

  • Scott Belsky is the chief product officer of Adobe and founder of Behance, Adobe’s social media platform. He’s an early investor and product advisor for top startups including Pinterest, Uber, Carta, and Airtable.
  • As 2020 comes to a close, Belsky predicts eight major trends to emerge in the tech industry in the near future.
  • He says talent will increasingly own their audiences through apps like YouTube, TikTok, and Patreon, and that systems and apps supporting creativity will be emphasized over productivity tools.
  • Belsky also says an era of “eduployment” will emerge, integrating the process of choosing a trade, getting an education, finding a job, or starting a company.
  • Visit Business Insider’s homepage for more stories.

As we pull ourselves out of the ditch that was 2020, there are a few major themes of the future I’m particularly excited about. I’m sharing them as a way to connect more dots, meet more founders, and solicit input to further develop these ideas.

No surprise, some of the companies I mention within these trends I know personally, but I have challenged myself to share ideas still on the cusp of breakout rather than the obvious trends and winners. Here they are.

1. The notion of “decentralized” is spreading to unexpected places. 

Yes, Bitcoin and blockchain-powered solutions are all the rage these days, and one side-effect is ideas for how other aspects of work and life can be decentralized. For example, Ben Rubin’s /Talk is developing ways to decentralize how teams work (it turns out the very notion of “meetings” may be an archaic and wasteful vestige of centralized workplaces).

The team at Braintrust is using both the principles and technology of blockchain to build a user-controlled talent network. Rather than take any fees or percentage of the participating talent’s income, Braintrust gains value alongside other participants via tokens that become more valuable as the network grows.

The team at CashDrop has built a way for anyone (from a taco stand owner to an apparel designer) to build a storefront without relying on a traditional marketplace that charges commissions or fees. Taking a step back, the traditional model of central owners of community-powered utilities (marketplaces, app stores, etc.) taking a percent of everything (and central “bosses” for huge teams insisting on reviewing and approving everything) may finally be getting old.

2. Behold the era of “eduployment:” The process of identifying a trade, getting an education, and getting a job (or starting a company) will become fully integrated.

Take Nana for instance, a company that will train you in appliance repair (think unique brands of dishwashers, etc), and then set you up in a marketplace to start getting jobs in your local area fueled by leads from the manufacturers of these appliances. Or take Main Street, who will train you as a painter, outfit you with everything you need, and set you up to be a successful business out of the gate within 30 days  –  essentially turning you into a franchise.

 

Rather than enduring an expensive education only to assume the complete risk of your career, this new eduployment model, as I’ve come to call it, gives everyone skin in the game. The vertical integration of education and employment is upon us, and I think this trend will help address (at-scale) major systematic issues in our economy at scale while also minting a ton of new small businesses.

Read more: No more student debt: 64 apps and startups aiming to replace the university experience

3. A few seemingly quirky social apps will tune into the under 16 demographic’s distinct approach to creation as a form of self-expression and tolerance for transparency by default.

I’m seeing more entrepreneurs starting social apps now than in years past, and they’re no longer building off of Facebook’s graph or emulating existing products with slight iterations. Nope, these are (finally) wildly new and original ideas. One of my favorites, under the radar but experiencing rapid growth, is ItsMe. Now approximately #24 in App Store under social networking, ItsMe connects you with others based on your mood, it make you create your own appearance, and allows you to communicate with text, voice, audio, or drawing among other forms. And there are a few other new social models brewing that I am quite excited about.

What do these next gen social platforms share? They combine ephemeral sharing with lasting reputation building, they lean towards default transparency and with a more liberal interpretation of “privacy,” and they have fewer creative constraints and are geared to reward those with the most creative self-expression.

In the category of social, I am also quite excited about the rebirth of Gowalla as a wild social game still a bit under wraps that will take place in the real world, and Public, a social network for public market investing. Suffice to say, the future of social is exciting and, contrary to popular belief, will not be constrained to today’s dominant social networks.

4. Talent will increasingly own their audience, with the rise of “channels of one” and community-as-a-service.

Gone are the days when super talented people needed to sign a contract with a TV network to break through. But the ad-supported and algorithmically-driven alternatives, like YouTube and TikTok, still have the upper hand with talent. The pursuit to “own your own audience” will be a macro trend over the coming years.

Equivalents to Substack (where you build and monetize your own email list) will emerge in video, communities, and other ways to build, manage, and monetize your audience. Some early breakouts like OnlyFans and Patreon give us a sense of what is possible.

I am especially enthusiastic about products like Circle and Geneva that power fully-fledged community functionality for brands and individuals. If you’re a content creator of any kind, you can now spin up a community to gather your audience and spawn all sorts of offshoot services to delight (and monetize) your base.

In such a world, the Instagram and YouTube type products simply serve as top-of-funnel marketing initiatives. The goal becomes simple converting everyone you reach on other platforms to your own privately owned and managed channel. We will see a massive acceleration of this trend in the years ahead.

Read more: The loneliness economy: Companies and entrepreneurs see a spike in interest for rent-a-friend services, chatbots, and online communities that target feelings of isolation

5. More and more niche functions of enterprise will become multi-player, powered by a next generation of highly specialized, AI-bolstered, enterprise companies with consumerized product experiences.

From procurement and security to financial planning and design, functions of a company that were once siloed to particular teams are being transformed by SaaS tools that are collaborative-by default, easier to use, and inclusive of stakeholders across the company. Those of you who co-invest with me know my obsession with this space.

From companies like Globality for procurement, Sora for HR interactions, Meter for WiFi and IT, Welcome for hiring, closing, and onboarding new employees, there are many approaches and the list goes on. These types of products will fundamentally change how big companies operate across functions while transforming the quality of life for employees.

To help fuel this transformation, WorkOS is building enterprise-readiness as a service, enabling new companies to start selling to enterprise customers with just a few lines of code, with the value proposition “Single Sign-On (SSO) to your app in minutes.” And Scarf is building tools for open source developers to service and monetize enterprise customers. So, lots of energy in this space up and down the stack. One side consequence of all this: increasingly crowded and outdated customer acquisition channels for enterprise SaaS. This is also a problem/opportunity to solve.

6. Creativity tools will be deployed across the enterprise, much like productivity tools were deployed in previous decades.

Until the age of AI, being more productive was the best way to stand out at work. But now, as bots and algorithms supplant mundane and repetitive labor in the workplace, the benefits of human labor will shift to the skills and capabilities that are uniquely human. Chief among them: creativity.

Think compelling ways to visualize data, better ways to share a narrative with your coworkers, attractive graphics to spice up every presentation, and powerful prototypes that are worth a hundred meetings. These capabilities will drive outperformance at work (and in school, and on social) in the coming decades, and everyone must be outfitted to make it happen.

Obviously, this is a major focus in my day job as chief product officer for my creative teams at Adobe. We see this massive broadening of the market divided into two types of personas: content-first creators and collaboration-first creators. The former wants to be start with something  –  an image, a video or a graphic  –  and remix or deconstruct. The latter starts by bringing together a group of people and leveraging a shared assets (we’ve been gradually turning Creative Cloud into a “creative system” of sorts for this very purpose). Of course, this need requires new types of tools on modern platforms like the web. Adobe, along with a whole ecosystem of new apps, are working to make this happen.

Read more: Sleep-tracking ring Oura is beloved by some of the biggest names in tech. We asked 7 investors and execs how it’s helped them revamp their routines to sleep better and live healthier.

7. New and disruptive interfaces will emerge that aggregate and connect the underlying services we use to live and work.

This is certainly not a new trend, and I’ve been writing about the “interface layers” and the “battle to be the default” since 2014. But the explosion of SaaS offerings for everyday work (enterprise trend noted above) and life is setting the stage for a new problem and opportunity: How do we stitch it all together?

Consider the digital spaces in which we spend our days  –  the “home” page of our favorite apps, the finder on our desktops, the home screens of our phones. We’re creating different kinds of documents, files, folders, and teams all over the place. We have specialized apps for everything and must manage permissions in so many places. All of these various cloud documents and services have different schemas and don’t interact with one another  –  it’s a mess.

Some companies are rising to the occasion, including Command E (an easy keyboard shortcut to open any document, contact, file or record from the cloud) and another early stage stealth company I am excited about. No doubt, all of these underlying services and resources WILL be stitched together, and whoever does the stitching will control the interface where we actually live, work, and make decisions.

8. Another round of the Roaring ’20s is ahead of us, where the pent-up desires from the pandemic will be unleashed in the form of fashion, travel, and culture-bending creative self-expression.

My family and I endured a good chunk of the pandemic with our neighbor and dear friend Jenn Hyman, cofounder and CEO of RentTheRunway, and her family. Needless to say, the stay-at-home world made for a very difficult year for Jenn’s team. But now, with a light at the end of the tunnel, Jenn has a new energy. She believes that post-pandemic fashion will have more fun and edge than ever before.

I agree, and imagine our vaccinated selves fervently jumping back into the world through travel, fashion, parties, concerts, and meeting new people. (After all, the last century’s Roaring ’20s also followed a pandemic, the 1918 Spanish Flu.) Our desire to fill the cultural void that has accumulated in us will result in a form of overcompensation that will make for an epic decade ahead (yes, I’m a relentless optimist).

Like all of you, I am eager to move past the challenges of 2020. I’m hopeful that we emerge more productive from the “great refactoring” we all endured, and that we can all reclaim the ~30% of cognitive load that has been consumed by politics, gaslighting, and a seemingly never-ending stream of things to worry about. With our newfound peace and capacity, may we all dream and build in equal parts!

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Scott Belsky is the founder of Behance, which was acquired by Adobe, where he now serves as Chief Product Officer and EVP for Creative Cloud. He is an early investor and product advisor for some of this decades top startups, including Pinterest, Uber, Carta, Flexport, Airtable, and sweetgreen among others. Get his latest book  “The Messy Middle” or sign up for his newsletter. Follow him Twitter.

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