Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Salesforce competitor Freshworks is riding the wave of hot Indian IPOs, looking to raise roughly $940m (depending on overallotment and pricing) at a valuation of roughly $9bn. The company’s positioning is interesting and growth has been rapid.

Salesforce competitor Freshworks is riding the wave of hot Indian IPOs, looking to raise roughly $940m (depending on overallotment and pricing) at a valuation of roughly $9bn. The company’s positioning is interesting and growth has been rapid.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a> announced its <a href="https://www.pymnts.com/news/ipo/2021/freshworks-aims-to-go-public-with-9b-valuation/" target="_blank" rel="noopener">IPO price range</a> of $28 to $32 per share and it is selling 28.5 million shares. At the high end of this price range, the company would raise $912 million and it would be valued at nearly <a href="https://goodwordnews.com/what-to-think-of-freshworks-first-ipo-price-range-techcrunch/" target="_blank" rel="noopener">$9.6 billion</a> (assuming fully diluted shares outstanding of 300 million).<div class="content-highlight">
Our base case valuation of Freshworks is implied market cap of US$13.5 billion or US$45 per share, which is 41% higher than the high end of the IPO price range (US$32). Given the solid upside, we have a POSITIVE view of this IPO. 
Our valuation of Freshworks is based on an EV/S multiple of 22.6x using our estimated sales of $546 million in 2022. The EV/S multiple of 22.6x is based on 30% premium to the average multiple of the comps in 2022.
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Freshworks (FRSH US) announced its IPO price range of $28 to $32 per share and it is selling 28.5 million shares. At the high end of this price range, the company would raise $912 million and it would be valued at nearly $9.6 billion (assuming fully diluted shares outstanding of 300 million).
Our base case valuation of Freshworks is implied market cap of US$13.5 billion or US$45 per share, which is 41% higher than the high end of the IPO price range (US$32). Given the solid upside, we have a POSITIVE view of this IPO. 
Our valuation of Freshworks is based on an EV/S multiple of 22.6x using our estimated sales of $546 million in 2022. The EV/S multiple of 22.6x is based on 30% premium to the average multiple of the comps in 2022.


<a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a>is getting ready to complete its IPO in the US Nasdaq market in the coming weeks. Freshworks is a fast growing, customer engagement SaaS software company. The company provides comprehensive SaaS services for marketing, sales, and customer support services.<a href="https://capital.com/freshworks-ipo-is-the-fast-growing-software-startup-a-buy" target="_blank" rel="noopener"> Freshworks</a> was originally found in Chennai, India in 2010 by Rathna Girish Mathrubootham and Shan Krishnasamy. Today, Freshworks is headquartered in San Mateo, California and has customers in more than 120 countries. IPO could be valued at about $10 billion - The company has put an IPO placeholder value of $100 million but this is likely to get revised up substantially. Back in April 2021, Reuters mentioned that <a href="https://www.barrons.com/articles/freshworks-salesforce-rival-files-to-go-public-51630166548" target="_blank" rel="noopener">Freshworks</a> IPO could be valued at nearly $10 billion.<div class="content-highlight">Strong growth in sales and profit margins - The company has excellent financials highlighted by strong revenue and significant improvement in operating margins. The company generated revenue of 249.7 billion won in 2020, up 44.8% YoY and 168.9 billion won in 1H 2021, up 52.9% YoY. Operating margins improvement has been very impressive going from -22.5% in 2020 to -4.8% in 1H 2021, driven by higher sales base and lower R&amp;D and G&amp;A expenses as a percentage of revenues.</div>

Freshworks (FRSH US)is getting ready to complete its IPO in the US Nasdaq market in the coming weeks. Freshworks is a fast growing, customer engagement SaaS software company. The company provides comprehensive SaaS services for marketing, sales, and customer support services. Freshworks was originally found in Chennai, India in 2010 by Rathna Girish Mathrubootham and Shan Krishnasamy. Today, Freshworks is headquartered in San Mateo, California and has customers in more than 120 countries. IPO could be valued at about $10 billion - The company has put an IPO placeholder value of $100 million but this is likely to get revised up substantially. Back in April 2021, Reuters mentioned that Freshworks IPO could be valued at nearly $10 billion.Strong growth in sales and profit margins - The company has excellent financials highlighted by strong revenue and significant improvement in operating margins. The company generated revenue of 249.7 billion won in 2020, up 44.8% YoY and 168.9 billion won in 1H 2021, up 52.9% YoY. Operating margins improvement has been very impressive going from -22.5% in 2020 to -4.8% in 1H 2021, driven by higher sales base and lower R&amp;D and G&amp;A expenses as a percentage of revenues.

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a> , a leading provider of cloud-based customer engagement software, filed for a $100 million placeholder IPO. Form S-1 starts with a founder letter, where Mr. Girish Mathrubootham describes the vision of a company: “What if we can create an iPhone moment in business software by blending existing technology with unified, intuitive, and delightful experiences? Just as the iPhone freed users from the hassles of carrying separate devices, we envision a new product experience that breaks down data silos and creates unified experiences”. Freshworks has applied to list shares of Class A common stock on the Nasdaq Global Select Market under the symbol “FRSH”. Morgan Stanley, J.P. Morgan and Bank of America are lead underwriters on the IPO.

Freshworks (FRSH US) , a leading provider of cloud-based customer engagement software, filed for a $100 million placeholder IPO. Form S-1 starts with a founder letter, where Mr. Girish Mathrubootham describes the vision of a company: “What if we can create an iPhone moment in business software by blending existing technology with unified, intuitive, and delightful experiences? Just as the iPhone freed users from the hassles of carrying separate devices, we envision a new product experience that breaks down data silos and creates unified experiences”. Freshworks has applied to list shares of Class A common stock on the Nasdaq Global Select Market under the symbol “FRSH”. Morgan Stanley, J.P. Morgan and Bank of America are lead underwriters on the IPO.

Freshworks IPO Preview. India’s First SaaS Unicorn

United States

Freshworks Inc. provides software as a service platform that enables small and medium-sized businesses to support customers through e-mail, phone, website, and social networks. The Company offers multi-product support, a knowledge base, self-service portal, community forums, and tools to leverage mainstream social media for customer support. Freshworks serves customers worldwide.

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Freshworks (FRSH US)

Freshworks IPO – Fresh and Juicy

freshworks is riding the wave of hot Indian IPOs, looking to raise roughly $940m at a valuation of $9bn and the company’s positioning is...

Mio Kato

Freshworks IPO Valuation Analysis

Our base case valuation of Freshworks is market cap of US$13.5 billion or US$45 per share, which is 41% higher than the high end of the IPO price...

Douglas Kim

Freshworks IPO Preview

Freshworks is getting ready to complete its IPO in the US in the coming weeks. Freshworks has an excellent combination of strong sales growth and...

Douglas Kim

Freshworks IPO Preview. India’s First SaaS Unicorn

We expect the high investor demand for Freshworks IPO as SaaS unicorn may disrupt CRM market by breaking down the silos of marketing, sales, and...

Andrei Zakharov

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