ET By Invite – Freshdesk is the New Flipkart of Startups

Chennai-based firm new watermark of innovation
Every generation of startups is defined by one talismanic company -a pioneering startup that breaks new ground and becomes an inspiration for a whole raft of other companies to follow its lead.In the previous decade, that startup was undoubtedly Flipkart.

While the jury is still out on the most important Indian startup is for this decade, a strong contender, beyond the usual suspects, is Freshdesk, a softwareas-a-service (SaaS) company which offers a cloud-based helpdesk service.


Compared to the Indian ecommmerce market of $6 billion, the enterprise software market in which Freshdesk plays in is worth $300 billion.The market cap of the top companies in this space is more than $1 trillion.

The opportunity here is that the world is transitioning from installed software solutions with arduous sales cycles to ondemand, cloud-based services.

While legacy software companies are also transitioning to this model, they are doing it at a glacial pace and SaaS startups like Salesforce have emerged to capture this business. Freshdesk is one of these pioneering startups.


The first generation of Indian IT companies targetting global customers were services firms like Infosys that competed on cost arbitrage. With a workforce in Chennai, Freshdesk has the same cost-advantage but has used it in a completely different way.

Freshdesk charges a monthly price to a customer but the cost of their service is not significantly cheaper than that of competitors like Zendesk.

So a customer is unlikely to choose Freshdesk simply because it is less expensive.

The difference is that Freshdesk packs a lot more value in the same offering, taking advantage of lower developer salaries and complementing the service with human-driven professional services like support and training.

This value arbitrage is a powerful weapon that other Indian SaaS companies can leverage.


Unlike many Indian startups who believe a good product solves all marketing challenges, Freshdesk recognised that a competent product is necessary but not sufficient for success.

The secret to Freshdesk’s rapid growth lies in building a marketing machine that diligently tracks and optimises every metric of the customer lifecycle from the cost of acquiring a new customer to minimising churn to inside sales to maximise share of wallet.

With a customer base numbering over 40,000, Freshdesk’s annual revenue is currently in tens of millions of dollars and is growing at a blazing speed.

While Freshdesk was not the first Indian B2B SaaS startup, it was the first one to raise major investor funding.

Freshdesk has raised a total of $94 million and was valued at $500 million in its last round.

When the company had only a beta product and no paying customers, Shekhar Kirani of Accel Capital gave Freshdesk the firepower to think big. Once the company had some customer traction, Lee Fixel of Tiger Global, followed soon after by Google Capital, invested in the company and helped create a repeatable, scalable business model.

Importantly, VCs did not passively invest money into the company after all the ducks were already lined up they took an early gut bet on Freshdesk and progressively supported its ambitions.


The accepted narrative in the Indian startup ecosystem is that the best founders are IIT graduates in their twenties.The founder of Freshdesk -Girish Mathrubootham, or his cofounder Shan Krishnasamy, couldn’t be further from this idealized notion.

Girish is in his forties and didn’t graduate from an exalted institute. But what he lacks in qualifications, he more than makes up with drive, humility and an almost hallucinogenic optimism.

At a time when the poster boys of the Indian startup ecosystem are uncouth enfant terribles like Rahul Yadav, Girish is a sharp contrast and is closer to the kind of startup hero India deserves! None of this is to say that Freshdesk has already made it -it still needs to significantly grow its revenues to be on par with category leaders and it has to broaden its product portfolio beyond its initial niche.

Despite this, there is no denying that Freshdesk is already a bellwether to a new generation of Indian startups -companies like ChargeBee, WizRocket, Recruiterbox and WebEngage -that have stayed away from the headlines and have instead focussed on building meaningful businesses.

If their early success is any indicator, we are at the cusp of a new golden age of tech entrepreneurship in India.

Hopefully, history will recognise Freshdesk’s part in pioneering this wave.

(Sumanth Raghavendra is a columnist with ETtech)

Source: The Economic Times



Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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