Latest Scott Berg News
Dec 23, 2021
2021 Nasdaq, Inc. CEOs, CFOs and chief legal officers typically lead the way when it comes to getting businesses ready for public offerings. But tech leaders play an important role too, as Prasad Ramakrishnan’s experience shows. Ramakrishnan is the CIO of Freshworks, an enterprise tech company whose cloud-based software helps businesses manage things such as customer support, IT help desks and sales and marketing operations. Since opening its doors in Chennai, India in 2010, Freshworks, which has appeared multiple times on the Forbes Cloud 100 list , has grown into an international software powerhouse and went public on the Nasdaq in September in a transaction that valued it at just over $10.1 billion and raised more than $1 billion to fund its expansion. For 55-year-old Ramakrishnan, who previously held top tech jobs at companies such as storage networking firm Brocade (now owned by Broadcom), edtech business HotChalk and Veeva Systems, which provides cloud services for life sciences businesses, getting ready to take Freshworks public meant that he and his staff of 165 people had work to do on multiple fronts. One of them was helping the company’s finance team by upgrading its technology so that it could finalize Freshworks’ accounts even faster. “As part of any IPO process, you want to set up your financials to make sure that the close process is as optimized as possible,” says Ramakrishnan, who also accelerated work to ensure key metrics were clear across the company. RIP dashboards As Freshworks grew, its internal teams had developed a smorgasbord of dashboards to gauge progress in their respective areas. While each tracker served its purpose, the proliferation of scorecards meant it was hard for the company’s leaders to get what Ramakrishnan calls “a single source of truth” about the overall state of the business. Even before Freshworks decided to go public, its tech team was charged with helping to tackle this dashboard jungle—a process that accelerated after the business set its sights on the Nasdaq listing. Altogether, more than 1,200 dashboards have been scrapped and the tech team has improved the way data is displayed on the relatively small number that remain. “The Street…expects a greater degree of control and governance,” says Ramakrishnan. “We were already on that path.” Another thing he cut back was his own range of responsibilities. In addition to being CIO, Ramakrishnan was also the company’s chief information security officer (CISO), overseeing its cybersecurity strategy. Freshworks decided that as a public company it would make sense from a corporate governance perspective to separate the two roles and appointed a chief risk officer not long before the IPO to be a peer to its CIO and to assume his CISO tasks. Prasad Ramakrishnan, CIO of Freshworks Freshworks Ramakrishnan says he supported the creation of the new position, which is occupied by his former vice-president of cybersecurity. “If you are going for an IPO and you are in a highly visible market, you want to make sure that you are giving that role and that function the level of visibility that the market is looking for.” While Freshworks’ CIO shrank dashboards and his own role ahead of its listing, he also expanded the amount of data available to the company’s sales and marketing teams. That involved accelerating the rollout of software from Leadspace, which aggregates data sources to give marketers and sales teams deeper insights into potential business customers. The move helped Freshworks to grow revenue by 46% year-over-year, to $96.6 million, in its first quarterly results as a public company, which were unveiled in early November. Ramakrishnan, who appeared on Forbes’ inaugural CIO Next list in April, says his team acts as an internal customer, piloting new Freshworks products before they go to market. Scott Berg, who covers cloud software stocks for Needham & Company, was impressed by Ramakrishnan’s focus on the quality of experience customers get when he heard him present in the run up to the September IPO. “I like the way he talks about product development,” says Berg. “He’s really focused on the front-end side of the software.” Stock slump Although Freshworks’ stock popped on its first day of trading, it has since fallen by more than 40%, closing at $27.25 on December 22. Some analysts noted its revenue growth rate had slowed in its latest quarter, declining from 56% in the prior one, but others cautioned against reading too much into the market’s reaction. “Ultimately we believe this is a case of expectations rising too high, too fast, rather than a fundamental issue with the business itself,” said a recent research note published by Barclays. Needham’s Berg remains bullish on Freshworks because it’s shown it can cross-sell effectively, leveraging its success in customer and tech support to move into areas such as customer-relationship management. Its technical architecture is also more advanced than that of rivals such as Salesforce, which Berg says makes it easier for customers to integrate its products into their systems. For his part, Ramakrishnan says he isn’t distracted by market fluctuations and remains convinced that Freshworks is making investments in the right areas to support healthy future growth. “As a company, what we can do is make sure we have a good, solid vision and a strategy and a plan, and then execute [on them].” Follow me on Twitter or LinkedIn . Send me a secure tip .