Girish Mathrubhootham steps down as Freshworks CEO

CHENNAI: After launching and guiding Freshworks from its “tiny” origins in Chennai to a global player that was the first Indian SaaS company to be listed on Nasdaq, founder-CEO Girish Mathrubhootham stepped down as CEO.

Making the announcement, Girish said the company would now be steered by Dennis Woodside, presently the president of the company, while he would continue to be involved in the new role as executive chairman.

Woodside had joined as president and member of the board in September 2022 after stints as the president of Impossible Foods, chief operating officer of Dropbox, and various executive roles for companies including Google and Motorola Mobility, where he was CEO.

Addressing the ‘Freshworks Kudumba’, Girish laid out what his new role would entail: “As I write to you today, I’m filled with many emotions. The past 14 years have been an incredible journey, one that has seen Freshworks grow from a fledgling startup in Chennai into the global SaaS company that we are today. I’m incredibly proud that we are the first Indian SaaS company listed on Nasdaq. We’re a true friend to more than 67,000 customers worldwide, and our global ‘Kudumba’ now has over 4,900 talented members.”

He said the decision to step down as CEO and transition to the new role had not been made lightly. It came “with a deep belief in our collective vision and the future of our company”. The seed for the latest development in the SaaS company was sown two years ago following discussions with the board on the longer-term plans for Freshworks, Girish said.

“I shared that when the time is right, I would like to shift my focus to our long-term product vision and invest in our presence in India.”

The announcement evoked mixed reactions with backers giving him thumbs up and expressing optimism about the company’s future. Those who felt disappointed opined that only the founder could understand the DNA of an organisation.

Meanwhile, Sridhar Vembu, founder-CEO, Zoho, posted on X: “Running a public company is a lot, lot harder than running a private company; it is like being on the treadmill all the time. As a private company, we invest in long-term R&D and infrastructure without worrying about how quarterly numbers would look.”

Freshworks, under Girish’s leadership—and with backing from investors including Accel, Sequoia, Tiger Global Management, and CapitalG-Freshworks – has expanded its operations to 13 global locations.

According to a report in business portal Moneycontrol, Girish declared that the Q1 numbers was more than their revenue guidance to $165.1 million. “We surpassed our operating free cash flows (FCFs). We generated over $38 million in FCF. For the full year, we have guided that we will be generating $120 million of FCFs, which has been revised upwards. Our IT business is really strong and doing very well.”

The guidance for the year was revised by a few million dollars, which he attributed to expected fluctuations in currency. “We also saw that there is still pressure in the SMB segment, where hiring has not picked up again. Due to this, our expansion revenue is under pressure. Usually, Q4 for the SMB business is a seasonally slow quarter. In Q1, we generally see a bounce back, but I think overall, in the market, there is macro pressure from SMB, and when guiding for the full year, we had to be more prudent,” the report quoted him as saying.

Even while categorically stating that he was not moving to India from Seattle, Girish said that he would be spending more time in India – and Chennai.

Brand expert Harish Bijoor termed the development as a ‘round robin change’, with the chairman on one end and CEO on the other - basically all internal resources rejigged. “From the external point of view, stock has tanked quite a bit due to the news related to this early change. In the medium to long term, this will work out well since all change is forward-thinking and it is not that Girish is out of the system – he is very much there. Also, the brand does not take a hit as the management continues and there is always business continuance because the new CEO is not altogether a fresh face… he comes with a pedigree, comes from within the system,” he added.