Why is Freshworks lowballing its IPO?

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Editor's note: It is sunny days for Indian companies that offer software as a service. Last year, however, over half a dozen unlisted SaaS firms turned unicorns—startups worth over $1 billion—as their investors valued them higher while giving them new capital. Against this backdrop, it would seem surprising that India’s best known SaaS company, the Chennai- and San Mateo-based Freshworks, would want to raise only $100 million in its impending initial public offering on the Nasdaq. Or so it has said in its filings with the US Securities and Exchange Commission. Analysts have estimated that the IPO could value it at $10 billion—meaning the company wants to just give away a percent of its capital in the public offer of shares. Freshworks’s revenue has been growing at a fast clip—a little over 40% year-on-year growth in 2020—and its losses have dropped significantly in the June quarter this year. The company boasts of gross margins of over 80%, coupled with low customer attrition. The SaaS industry, too, is on a roll, with its business exploding due to all the digital transformation companies have …