 "Now, we want to be successful as a multi-product company: Freshdesk CEO")
Cloud-based customer engagement software firm Freshdesk has raised the seventh round of funding of $55 million led by Sequoia Capital India, a new investor for the company, and the existing investor, Accel Partners. With the latest round of funding, the total funds raised by the company so far is around $149 million. Since the last round of funding, the company has so far acquired six companies - 1Click, Frilp, Konotor, Framebench, Airwoot, and Chatimity - as part of enhancing its offerings in various platforms. In an interaction with Gireesh Babu, Girish Mathrubootham, founder and CEO of Freshdesk elaborates the latest developments and the way forward for the company.
Edited excerpts:
Freshdesk has made several acquisitions and has raised funds in the latest round of funding in the recent past. Where does the business stand now?
We are in a pretty exciting phase and business is going through hyper growth. A lot of work is happening in various aspects including engineering and sales and we are gearing up for the next phase of growth, which involves getting all the systems in place before it becomes well-oiled machinery. That is how we feel right now.
The first phase was to establish Freshdesk in leadership position, making a global brand from India. We have launched multiple products. The next phase is to continue the momentum on Freshdesk, but also scale the new products to the extent of Freshdesk today, to prove that we can be successful as a multiproduct company, and not just a single product company. We have four products now.
What is the current status of the new products?
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Freshsales is already scaling up nicely and it is probably following the trajectory of Freshdesk or even faster. We are really excited about it since it is a huge market and Customer Relationship Management is big opportunity to be tapped, since everybody knows the big leader and many people have been unhappy with the current solutions in the market.
We are also equally excited about Hotline.io, which is a very innovative product from Freshdesk. There is literally no competition Hotline.io, if you look at the features we offer. It is like adding a WhatsApp channel into every app. For mobile first companies, those who have seen the product, have really loved it. The pipeline looks exciting for Hotline.io, we just have to put our heads down and execute.
It is a continuous process of evolution. We need to be looking at the trends and making sure that we are best of breed. We are focusing a lot on collaboration, machine learning, chat and chat bots and expect innovations to come from Freshdesk in lot of these areas.
What is the strategy behind the acquisitions you have made and the way forward?
We don't have a plan on what kind of technologies we need to acquire or where we need to acquire. We are taking it more opportunistically. When we got the first two-three companies, people who were not able to scale up independently started seeing Freshdesk as a natural home for start-ups in business-to-business (B2B) space. We received a good deal flow. Obviously, we look at team and technology. The highest priority would that if the product or the technology the team has built can be directly used into Freshdesk. But even if the technology or the product is good and relevant, if we don't like the entrepreneur or the founders, if we don't feel that they are a cultural fit into Freshdesk, then we don't do the deal. We definitely want to have a good technology fit and a good cultural fit with the founding team. It will also be nice to have business revenue, but in India, it is hard to acquire revenue, as the company with good revenue will get funded and continue for a longer time. We are open to look at anything, if it makes sense for us we will move.
We are looking at technology, team, mostly in the B2B space, machine learning, customer support, CRM, related areas. We have not actually actively scouted for any start-ups with engineering teams in the United States (US) or Europe, overseas, but good technologies, good team from anywhere, we are open for further acquisitions.
Could you elaborate on your latest round of fund raising?
We have always maintained that we are not under pressure to raise any money and that has given us a lot of leverage. With the business we have and the team, culture, product and the customer base, we have always been fielding inbound request from investors globally. We wanted somebody who just not look at it as a pure-play valuation, but also understood what we are trying to build in Freshdesk and the long term strategy, when we raise the funding. I don't optimize for valuation. I can wait for one more year and try to get more valuation, but that is not what we do. I don't want to go to the edge. We have enough money for more than five to six years, and that is how we have always been.
Have you reached break even?
We can break even if we want, but we are investing in growth. We have always maintained very low burn. Considering the nature of our business, with a healthy net expansion rate where our customers pay more money as against what they paid a year ago mainly because their business has also grown, we are actually investing in growth to get more customers.
In terms of people, we have around 880 people in the organisation now and in terms of customers we have around 80,000 customers. We don't want to disclose the revenue. We are targeting a 200% growth this year.
Have you reached the status of a unicorn now?
I think we are getting there. But I am not looking at it; it could be more of a distraction now if we focus on it.