According to an SEC filing, publicly traded SaaS business Freshworks is paying $230 million to acquire U.S.-based startup Device42. Freshworks also disclosed that founder Girish Mathrubootham has resigned as CEO in conjunction with the acquisition announcement. Dennis Woodside, who joined Freshworks as president in September 2022 and was previously CEO of Motorola Mobility, will be the next CEO. Mathrubootham has been promoted to executive chairman.
Device42 offers mainframes for cloud systems insights and helps businesses manage their IT infrastructure. Device42 began providing carbon emissions tracking not too long ago. With its all-inclusive, real-time inventory of all IT assets (hardware, software, and network components), Device42 says it can provide businesses with more system visibility and resource allocation optimization.
Founded in India, Freshworks maintains its headquarters in San Mateo. The firm made its first purchase, Device 42, since going public in 2021. Mathrubootham told investors at the results conference on Wednesday, “With more than 800 customers around the world, Device42 provides enterprise-grade IT asset management capabilities, which we believe can further strengthen our Freshservice offering.”
Device42 and I have previously collaborated on major industry business prospects. We also look forward to working as a single, cohesive team to serve clients when the acquisition is complete. He stated that they expect to finalize the deal later in Q2.
Crunchbase states that the business had previously raised $38.5 million from investors such as LongRiver Investments and Elm Street Ventures.
Having founded Freshworks in Chennai in 2010, Mathrubootham has been a major figure in India’s SaaS growth story for more than ten years. While he will remain on the board of Freshworks, shares of the Nasdaq-listed company dropped 25% in trades after the markets closed, possibly removing about $1.4 billion from the company’s market capitalization. Rivals of Salesforce, ServiceNow, HubSpot, and Zoho, Freshworks closed trading on Wednesday with a market capitalization of over $5.3 billion.
According to management, “Mr. Mathrubootham will now be able to concentrate on long-term product strategy and AI thanks to the established succession plan.” Although there is a change at the top, Mr. Woodside’s solid history and significant contribution to the development of Freshworks’ Enterprise GTM motion since joining the firm provide us comfort,” Morgan Stanley analysts said in a note on Thursday.
In its first-quarter results report on Wednesday, Freshworks revealed ongoing difficulties in both customer service and small and medium-sized company categories. Freshworks expressed optimism about the adoption of its AI-powered products, Freddy AI and Co-Pilot, by various client groups.
