Merger and Acquisition

Freshworks Announces Acquisition of Device42 for $230 Million as Part of Strategic Expansion

• ByStartupStory     |    May 3, 2024

Freshworks, a leading Nasdaq-listed SaaS company, has acquired Device42 for $230 million, as confirmed through an SEC filing. The acquisition aligns with Freshworks’ strategic direction amidst a series of top-level organizational changes.

According to the details released, Freshworks will pay $215 million in cash along with a $15 million equity rollover, welcoming Device42 as a wholly owned subsidiary while retaining all its employees. Device42, headquartered in the US, specializes in providing comprehensive tech solutions including IT support, compliance, audit, and asset management.

This acquisition is particularly noteworthy as it follows Freshworks’ recent financial disclosures for Q1 2024, where the company reported a net loss of $23.3 million, marking a 45.3% improvement year-on-year. Despite the losses, Freshworks demonstrated robust revenue growth, with a 20% increase to $165.1 million compared to the previous year.

The acquisition coincides with significant leadership changes at Freshworks. The company announced that CEO Girish Mathrubootham has stepped down to assume the role of Executive Chairman, focusing more on product vision and innovation, especially in AI. Dennis Woodside, previously the president of the company, has been appointed as the new CEO effective May 1.

Girish Mathrubootham expressed his enthusiasm about the transition, stating, “This new role will allow me to allocate more time to our long-term product vision, innovation, and AI strategy.” He emphasized the strategic importance of these areas in sustaining and enhancing Freshworks’ market position.

The organizational reshuffle at Freshworks also includes the departure of its India head Karthik Rajaram and changes in other senior positions in recent months. Freshworks has also strengthened its leadership team by appointing Mika Yamamoto as the Chief Customer and Marketing Officer and Johanna Jackman as the Chief People Officer.

Founded in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, Freshworks went public in 2021 and has since been a prominent player in the global SaaS market, offering innovative solutions in customer service, engagement, and IT service management.

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