How Accel spotted a winner in Freshworks

Accel Partners, the US-based venture capital firm, invested $1 million as a seed capital in 2011 in Freshdesk (now Freshworks) for a 23 per cent stake. It paid off heavily with the investment today worth over $3 billion after the Chennai/US-based SaaS company was listed on the Nasdaq on Wednesday, and trading at over $45.

Accel also participated in or led every subsequent round in Freshworks, which totally raised $400 million at a $3.5-billion valuation from investors such as Accel, Sequoia Capital, Tiger Global Management and CapitalG. Accel’s stake in Freshworks is now around 26 per cent, says media reports.

“It is an amazing journey for Freshworks. Once in a lifetime experience of working closely with the founders when they were a team of 6 to today with 4,000+ employees and achieving a milestone of IPO on their journey in building a long-lasting and durable software company,” Shekhar Kirani, Partner, Accel Partners, told BusinessLine. He has been associated with Freshworks right from the seed funding.

Working with Freshworks

Kirani said that he met Freshworks’ founder Girish Mathrubootham and the team in Chennai when they were in a small office. “My initial read was that there is a diamond that no one has noticed, and it is an opportunity for Accel to work with the team. He was great in storytelling, very transparent, and was able to communicate his vision very succinctly. Within the first few hours of the conversation, we knew we are going to partner,” he added.

“He has accomplished more than what we all expect but note that the ambition of Freshworks is quite big and they will continue to push for the same. We knew that Freshworks is special from the very early days. The ingredients for making the company into a phenomenal growth company were all in the favour of the company,” he said.

Big market, great founding team, a strong sense of customer focus, and ability to make decisions and execute. From the very early days, the company has been growing its customers and revenues at a rapid pace and knew that they could continue to do so, if they kept their culture intact, which has been the case, said Kirani.

It is possible to dream big and then execute towards the dream of accomplishing extraordinary milestones in their journey of building world-class companies, Kirani said on learnings for other start-ups from Freshworks.

When asked with Freshworks now a leader in the SaaS space, how they will handle the pressure to remain on top, Kirani said the company and team have to work hard and smart about their leadership position by innovating on products and serving customers.