Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Freshworks IPO | Channel Insight - Your SaaS SuperStar

Asian SaaS Stars: Opportunities, Market Outperformance, & Key Challenges

Freshworks IPO Preview. India’s First SaaS Unicorn

Equity Capital Markets

<p><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).</p><div class="content-highlight">
<p>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. </p>
<p>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.</p>
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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.


Freshworks

Freshworks IPO Valuation Analysis