After a blockbuster IPO and slump in its stock price, Freshworks continues to remain optimistic of its prospects and ongoing product innovations. In India, it is also gearing up to foray into public sector and government projects and the talks are on. In an interview with BusinessLine, Karthik Rajaram, Vice President and Country Head, India Business, Freshworks discusses the new focus areas for its products, growth prospects and its vision to cater to the next 5 million companies.
Indian SaaS businesses have mostly been catering to clients in the US. How is the demand pattern shaping up in India especially post the pandemic? Are you seeing more queries here?
We have always had great demand in India, with Covid it has grown manifolds. Over the last couple of years, my team and I have been fortunate to witness the transformation that has happened across the spectrum. On one hand we are seeing companies taking their first steps towards digital transformation and on the other hand, there are digital natives disrupting and challenging status quo, literally innovating at the speed of light. We are seeing demand across. The larger traditional companies are getting disrupted by these new age edtech, fintech players. These companies want to understand what is happening and get a competitive advantage to the digital natives in customer experience and employee experience.
We have seen increased demand across the sectors including BFSI, travel, logistics, hospitality, ecommerce and manufacturing. In terms of products, our vision has been very straight to make it easy for businesses of all sizes to make customer experience delightful so we build the software that is easily used, intuitive and affordable. One of the things we care very deeply about is that we just do not want to build for the Fortune 500 but also the next 5 million. This is the essence of everything we do right from building products, go-to-market strategy or onboarding and supporting customers.
We are disrupting two major sectors CX and IT support. IT support is globally a $ 120 billion market opportunity. Older SaaS company products are very complicated, there is a lot of plumbing involved.
What’s the gameplan for Freshworks to gain new customers in India?
We are innovating and have massive strength in India. We have 80 per cent of the staff sitting out of here. A lot of critical functions like product and engineering are happening in India. We are working on a few strategic products like the Master 360, unified view of the customer. This is something we are betting on heavily. We have recently launched unified CRM for e-commerce and we are partnering with Shopify to help merchants on their platforms and help them give better customer experience.
Freshworks as a company believes in sustainable believable strategic growth. We are innovating very fast and that needs us to make as much investment into the company. In the last 11 years, we had phenomenal growth and there’s no reason for us to think otherwise. The IPO was a great event for us and we have sufficient money in the bank to help us.
Which are the regions that Freshworks is focusing on globally?
North America, Europe, Asia Pacific, Middle East and Africa — all of these are important. We have customers across the globe. With our product portfolio we ensure that customers from diverse geographies are catered to.
In India we have seen tremendous growth in demand. We have 100 unicorns in the country and a significant percentage of them are clients of Freshworks. We are also foraying into government and public sector market in a big way. With Digital India we are seeing a lot of government entities wanting to transform their services and we are in talks with a lot of them.
Are there deal sizes and buckets that the company targets? What is the average deal size? Do you plan on expanding them?
We have about 60,000 clients globally and serve companies across the spectrum from MSMEs to big companies. So, deal sizes range from a few hundred dollars to million dollars. The number of companies spending $ 5000 with use every year, are growing significantly QoQ.
Tech talent shortage has been rampant in India and around the world. How is Freshworks managing it? What has been the attrition rate? Any update on hiring plans in India?
The problem of Great Resignation is very real. There are folks from our company who have gone on to start their own start-ups and we are very proud of that. Our organization has that entrepreneurial spirit. Employee engagement and talent retention is very critical. As long as there is clarity and alignment, people stay. Girish has been talking about Tripod — the three pillars include growth, learning and commitment.
We have added tons of employees in the last few years. We hire depending on requirements and across functions. We are expanding massively and headcount addition will be aligned to these requirements.
How does the company assess the global tech stocks fall? With valuations dropping steadily, how does this impact the company business?
There are controllable and uncontrollable factors. What is controllable is our product, business and execution, we are completely focussed there and doubling down. Tech stocks have been battered for over two-three quarters now and that has been happening with all companies. It is not in their control, what can be controlled is the business metrics.
A lot of legacy IT companies are acquiring start-ups, which is also driving their revenues. Is Freshworks planning to acquire more start-ups beyond the 13 it already has?
We put our customers in the front, so any acquisition we plan on is driven by what business value we will be able to provide to our customers. We have had very successful acquisitions in the past where there were synergies. We will continue to do if there is a need to do it. Right now, we are focussed on executing on our product and delivering to our customers.