Freshworks' Journey to India’s First SaaS IPO

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Growth Story is a weekly podcast that breaks down the strategy and tactics utilized by high growth companies, in a short case study format hosted by Scott D. Clary (@scottdclary)

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Welcome to success story, the most useful podcast in the world. I'm your host, Scott D clary. The success story podcast is part of the hub spot podcast network. The hub spot podcast network has incredible podcast like the Martec Podcast, hosted by Benjamin Shapiro. Each week the Martech podcast tells stories of world class marketers who use technology to create lasting success with their business and their careers. If you like any of these topics, you're going to like the MARTYCH podcast. How Science is changing advertising, how to set up a crm so you actually use it. Private equities take on digital transformation by big social is focused on newsletters. If these are topics that resonate with you, go check out the MARTECH podcast wherever you get your podcast, or you can also go listen on hub spotcom slash podcast network. Today I'm going to speak to you about fresh works. This is a business case study. So we're going to speak about how fresh works became the first Indians Sass Unicorn over billion dollar valuation. We're going to speak about how they became the first Indians Sass Ipoh...

...when they ipoed on the NASDAC just this September. We're going to speak about the origin story, how they came up some of the strategy, how they competed in a red ocean and a blue ocean simultaneously, how they compete it against Zendesk and sales force and how they leverage both of those companies against themselves. We're also going to speak about their product suite. We're going to speak about some of the guerrilla marketing methods they use and also how they were so successful to the point where they went public they achieved a twelve point two billion dollar valuation on their first day of trading. This is a fresh works case study. This is fresh works growth story, so let's get right into it. Fresh works journey to becoming India's first SASS IPO. So fresh works, formerly fresh desk, has long been the leading light in India's SASS industry.

It was India's first Sass Unicorn, ushering in an entire new wave of SASS firms as they became India's SASS superpower. Since last year, the Indian software as a service sector has been developing at a breakneck pace, but fresh works NASDAC public offering has pushed things to the next level. The company, which creates customer engagement software for businesses, was valued at twelve point two billion dollars after its stock open, twenty one percent higher than it's initial offering price at thirty six dollars per share. But how did it all start? So fresh works, which is founded in two thousand and ten by the current chief executive officer, gearish Methrough Bootham, and the current chief technology officer, Shan Krishnamis, delivers business software to fiftyzero clients in over a hundred forty countries. Fresh works provides over eleven products, as well as an aipowered software as a service platform to improve customer experiences, increased staff efficiency and enable a developer and partner...

...ecosystem. Fresh works began with a single product, fresh desk, aimed at the customer support software industry. To quote Ramish Ravish Shank car, fresh work senior director of marketing, we wanted to make a platform that combined assistance with businesses social networks, for example. So fresh desk allows clients to connect facebook pages and twitter accounts into their health desk and manages them from there. It also enables them to communicate with consumers via WHATSAPP to address issues. More swiftly. More traditional customer care capabilities like live chat and the conversation of support communications into trackable tickets that help desk can handle. Our complemented by these functionalities. So fresh service is a cloud based it service desk software that assists with tickets submitted through email, a self serve portal, phone, chat or in person.

That was introduced in two thousand and fourteen. Fresh works became the umbrella name for current and new goods two years later. After the creators then also introduced fresh sales. So fresh works product sweet is position as offering marketing, support and sales for the whole customer experience, from acquisition through to relationship termination. It provides cloud as software organizations with up to five thousand workers and also utilize the software as a service products to manage its operations. So fresh works conducts up to over Fourzero Marketing and advertising initiatives each year, accounting for around seventy percent of the company's income. This is also reflected in its recurring revenue growth, which is surpassing over two hundred million in Arr in just that was in two thousand and nineteen when I got those last stats. So this is going to be even even greater. But how did they get to well well over two hundred million arr twelve point two billion dollar valuation? What's the strategy?...

So fresh desk was the company's first customer service software. Fresh service in two thousand and fourteen, fresh sales in two thousand and sixteen, fresh team in two thousand and seventeen, and now a comprehensive suite of enterprise solutions that captures a whole customer life cycle have all been released. So let's figure out how they got to the point where they could even launch these products. So first, creating a blueprint for the red ocean market. So all these services, customer service, marketing, automation, it support and so on, have significant markets of their own. So gresh focus on how to identify Red Ocean markets and developed the strategy to perform effectively in red oceans. In Blue Oceans markets, the firm would need a specialized sales staff to educate clients on why they need a product that's very different from a red ocean and the Red Ocean there's already a define market. That does not require as much discovery people get when you're selling, but it does require significant effort and money to stand out. There were approximately six hundred help desk products on the market when fresh desk...

...launched, creating a deep red ocean industry. Fresh desk also was able to tryumph thanks to the ease of the product, as well as solids execution and very pleasing uiux. This helped its traffic grow and they have pretty much stained it over the years. If you actually look at their data, they have an enormous amount of organic traffic hitting their website and this coupled. So they have a strong organic strategy. But they don't ignore that you have to have an organic and a paid so they have over four thousand, like I said, four thousand marketing and advertising activities. They also have a very strong SEO strategy, which drives traffic to their site. So it's a combination of both organic and paid that is making them stand out in a very crowded market place. But all the marketing in the world doesn't matter unless you execute. So they continuously execute like their execution continuously outperforms their competition. So what does that actually look like? Well, because of execution against their marketing strategy and some...

...other things that I'll speak about in a second, fresh works went from one million in a rr to a hundred million Arr in only five years. This is a pace of growth that is on par with the greatest stass businesses in the world. To get to this point, you need some unusual marketing methods and you have to execute against them. This is not run of the mill growth. So to fight against established companies like Zen desk and sales force, fresh works generated online content, but also use some guerrilla marketing methods. So they did every traditional marketing play in the book, but there were some things that really made them stand out. So fresh works was mentioned amongst wellknown firms like Zendesk as part of the rip off or not campaign. So the Zendes CEO labeled fresh desk as a ripoff on twitter because of the word desk in both titles, obviously very similar, as like the very similar products and companies.

Instead of retaliating on twitter, fresh desk launched the ripoff or not campaign, which proudly displayed the zendesks CEOS accusation and encourage users to make up their own mind. Fresh desk received PR alongside Zendsk as a result of this, thus putting it on the same level as the industry leader and they use. They cleverly used the competitors insalt as a way to gain awareness of their company. Fresh works also gate crash dream force. So sales forces largest event, one of the largest software events in the world in two thousand and eighteen, by taking to the sky with a Hashtag fails force blimp that circled sales force tower throughout the week long event. The goal was to persuade customers not to pay for bloated software like sales force. GEARIS describes how fresh works focuses on online client acquisition and, obviously, how this is aided the company's worldwide expansion using local talent. But they definitely haven't been reserved in their marketing. So...

...they promote themselves as the leading help desk provider. The first result for Zendsk versus fresh desk, because they killed it at Seo, is, quote, fresh desk versus the others. See who's the number one help desk tool. So they not only kill Seo so that even when you're searching for a competitor, your preferred article is popping up, they're also crashing sales force. They're also leveraging other companies, trashing them and using that to get additional publicity. So they're great at traditional marketing. They're also great at these really obscure guerrilla marketing strategies. And the last thing they did, well, not the last thing. Did a lot of great stuff, but that one of the last things they did that I'm going to talk about today, is they created solutions for disadvantage SMB's. So fresh work was able to acquire market share by catering to the long tail small businesses, not just in India but throughout the world. So even though the help desk industry was incredibly competitive, the SMB market...

...was a little bit of a Blue Ocean. Existing solutions were either too difficult to complex or too expensive for small businesses to use. So instead of elephant hunting or whale hunting going after big enterprise, which all the global players were focusing on, and concentrating on fresh desk, or actually gearish refers to it as deer or rabbit hunting. So SMB's account for half of fresh desks or the company's revenue, with the remainder coming from mid market and corporate customers. So it is well reflected in how well ellaborates the other apps to create an ecosystem works well with other SMB products as priced so that smbs can afford it, and that makes half of the revenue. So fresh works easy to navigate, website, straightforward pricing, intuitive design, ease of configuration, all of which are important for any product to find acceptance by SMB's, also helped it acquire traction. So after they captured smb something that no one else was going...

...for. That, along with their marketing, along with their ability to effectively also go after a red ocean market and then ultimately build out a product suite that complemented what their customers were looking for. Is How they want. Three main reasons, just takeaways. Coles nose. To wrap up, taking advantage of the situation, fresh works picked a booming market and was able to outperform the competition in terms of product execution and design. Taking advantage of their assets, fresh works establish its unique approach to target the long tail of smbs rather than following the worldwide SASS model of sales driven development, and also focusing on those enterprise whale customers. And lastly, getting a chance to play in the major leagues early on in its journey by distinguishing and generating noise. Through creative PR methods guerrilla marketing, it was able to place itself amongst market leaders like Zendesk and sales force. Fresh works always had the goal of expanding internationally,...

...which entailed learning about market dynamics, category landscape and geographic peculiarities before entering a new country or area. In two thousand and nineteen, fresh works became the first Indian SASS business to reach a billion dollar valuation. Fresh works was preparing for an initial public offering for two thousand and twenty one with the NAZAC listing. The last round before the IPOs of the PRE IPO deal was entirely meant on establishing the company's worth and establishing a benchmark for how much fresh works could be valued at in the IPO. And then, finally, on September twenty two, two thousand and twenty one, the shares began trading on the NAZAC global select market under the Ticker Frsh and the initial IPO price was set at thirty six dollars per share, easily achieving Unicorn status and claiming the title as the first Indian SASS company to not only reach a Billion Dollar Valuation but to also IPO.

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