How the Freshworks Founder is Defining the New-age Tech Investment
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For any young startup, having a unicorn founder like Girish Mathrubootham as an early investor is a boon. When we met the founder of Freshworks in Chennai — his wit, pleasant mien, intelligence and avant-garde ideas — all suggested why he is one of the most sought-after investors in India. Girish has always been the one who took charge of his decisions in life, right from the beginning. If one’s parents separate when one is aged just seven, then one tends to mature a little early, and of course, one grows to be self-dependent. “I believe as parents we shouldn’t be taking all the decisions for our children because, at the end of the day, when you take your own decisions you learn to live with the consequences,” he says.
His parents’ separation remains a defining moment in Girish’s life. It not only prepared him in his entrepreneurial undertakings, but also in being a parent to not just his children, but to his employees as well. He even mentors startups he invests in as a father mentors his child. Oftentimes, he lets them take their own decisions.
Born and brought up in Trichy in Tamil Nadu, Girish went on to study engineering in Chennai. Being an average student, Girish developed his own way of learning things, which was different from what one normally does in a classroom. He went on to do his MBA from the University of Chennai with the financial support of his father. He had a few brief job stints, where he also learned Java on the job. Soon, Girish began giving Java training to his friends as well. Sharing his unique way of learning, Girish says, “I had this habit of structuring all these engineering subjects like logical stories so as to easily remember and write the stories.”
It was this time around, Girish began running an education institute offering Java training, but the venture didn’t last long. Though ephemeral, he found it to be fruitful and scalable. He joined HCL and moved to the US, where he stayed for a year. He returned to India to set up a training company in 2001. Soon reality stuck in as the training business became very cyclical. In 1999, when Girish was teaching Java, it was all the rage — everyone wanted to learn it. But in 2001, he had to convince people why Java is still relevant. That was the hardest part for him. But he knew the importance of riding a wave.
In a growing market, it is easy for one to establish and grow a business. That’s the reason why, in 2010 when he founded Freshworks, he chose existing commodities wherein they rise on SAAS. Before Freshworks happened, Girish worked with AdventNet (now known as ZOHO) from 2001 to 2010. Sharing the idea behind Freshworks, Girish says, “When I returned from the US in 2010, as a customer I had a horrible customer service experience when I wasn’t able to get the support from a household goods company, despite calling or emailing the concerned department several times. It was only when I lambasted them on Twitter that the company did the right thing. That’s when I realized that there exists an opportunity to build a fresh helpdesk. It wasn’t difficult as I had built multiple helpdesks as a part of the management team at ZOHO. In customer support helpdesk was still something new. That’s why we called the company Freshworks.”
But the actual push came — while Freshworks was in its ideation phase — when Zendesk, a customer services software company in the US increased its prices in May 2010. That’s when Girish thought to ride this wave. “I decided to get into the helpdesk market and I knew I could charge customers from day one. I didn’t realize who will fund Freshworks as I had never met a venture capitalist in my life,” says Girish.
A blog-writing contest run by Appsumo worked in Girish’s favour. It required one to write a blog on lean startup. Girish wrote the Freshworks story, where expounded how a simple comment on Hacker News motivated him to resign from his comfortable, well-paying job and launch his own startup. While he didn’t win the Appsumo contest but his blog which, he had posted on Hacker News went viral.
His product was not ready, yet he earned 300 sign ups. In his blogpost, Girish thanked many people like Naval Ravikant, founder of Angel List and Venture Hacks. Ravikant, in turn, offered to introduce Girish to investors in India. Girish posted on Angel List on Ravikant’s advice. Anand Daniel of Accel Partners, who had seen the original blog post, also connected with Girish. Around the same time, the team launched the product. Soon they on-boarded their first customer from Australia, who didn’t even speak to them, just became a customer after experiencing the product’s trial version. They got six more customers from four different continents but none from India — making them an international tech company from day one.
In 2011, Girish went on to participate in Microsoft BizSpark contest and won the first prize of $40,000. Freshworks was the finalist in another event called Unplugged. These achievements helped the startup garner the investors’ interest. In the same year, he went on to raise a million dollar from Accel Partners. Talking about the investors’ interest in Freshworks, Girish says, “In all our [funding] rounds, many people were interested in us. So, we could choose the best among them, which is why today we have Accel [Partners], Sequoia [Capital] and Tiger [Global] backing us.”
Asked what advice he has for startups, Girish says, “My biggest advice to startups is that you have to understand your business model. For example, if a startup is really building something that doesn’t exist, I cannot advice them to advertise on Google because nobody will search for them. If they are going to sell to larger enterprises they can’t sit in Chennai and sell. They have to hire a VP Sales.”
Today, Girish is a part of Chennai Angels but has done a lot of investments on his own. He says, “I must confess not being very much active there because of time constraints. I have done a few investments through Chennai Angels, a few through LetsVenture.” Girish has so far invested in more than 50 startups. As per him, “I learn a lot while working with younger entrepreneurs.”
When asked if startups should lose more equity in early stage of business or stick to it, Girish says, “You should have more mind in the game rather than skin in the game.” On what is it that compels him to invest in startups, he says, “You know you can’t always get the world class. But there are entrepreneurs who are working on very smart ideas. They may not be successful but one can give a shot and back them.” His basic fundamental of investment is “If I like the founder, I like the product I want to invest.”
Although his angel investments cheques are small, more than the money, having him onboard can add a lot of value to any budding or established startup. He says, “I always believe founders know the best about their business. Based on my learnings in Freshworks if I can give them some advice. I tell them the process, give all the suggestions but they own their decisions.”
Out of more than 50 investments most of them have been in technology. Girish gets a lot of references for investments. Sharing one such example of investing in Unacademy, he says, “I was actually on a vacation. Blume Ventures connected me to Gaurav and said here’s a good company. Gaurav called and I quickly understood what they are trying to do. Clearly, I could see that this is an amazing team. Earlier, they were not monetizing it. Blume had already invested. There was a gap they were trying to fill. Users really like the product. I have closed many rounds over Hikes and WhatsApp.”
Girish’s first investment was in a company called Shieldsquare, which pitched at Microsoft Bizspark. Another one called Inkmonk, from where he had ordered some t-shirts. “When the t-shirts came I really loved the quality. This guy had come to collect payments and we spoke. He was a designer who used to work for HackerEarth and he had a printing technology. He had a good network of printers. As a customer who loved the product, it was a great yardstick to invest,” Girish states.
Though Girish is not part of any angel fraternity, yet he is grabbing many opportunities by their tails when it comes to deals. Asked how he manages all that, he says, “From other angel investors, I keep getting some deals. Sometimes, Rajan Anandan (Google India’s managing director) recommends. But I have to like the founder, I have to like the product. Some friends like Manav Garg of Eka Software at times re-invest in a company and I invest along.”
In October, Girish invested in an intelligent apparel brand, Turms. He says, “Digital-first brands are creating immense value globally. Young brands like Turms are disrupting the apparel industry, and creating a niche market for themselves with their unique offering of intelligent apparel. The company has shown exponential growth in the last one year while maintaining quality and consistency. As a Turms consumer and an investor, I am very proud to be associated with the team since its inception.”
Even Fyle, an expense management startup, wherein, Girish invested had first met him as a customer. In July this year, Freshworks raised $100 million in funding from investors such as Sequoia, Accel Partners, and CapitalG at a valuation of $1.5 billion and joined the unicorn club. With 1,300 employees, Freshworks has already achieved $100 million annual recurring revenue and $250 million in funding to date. Whether, it will back another unicorn and create history remains to be seen.
Founded in October 2010
Freshworks Inc is backed by Accel, Tiger Global Management, CapitalG and Sequoia Capital India. The company’s products include Freshworks, Freshservice, Freshsales, Freshcaller, Freshteam, Freshchat and Freshmarketer.
Freshworks is headquartered in San Bruno, California, with global offices in India, the UK, Australia and Germany. The company’s cloud-based suite is widely used by over 150,000 businesses around the world, including the NHS, Honda, Rightmove, Hugo Boss, Citizens Advice Toshiba and Cisco.
(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)