Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a>  upgraded its revenue guidance to ~$502M at the top end for FY22 and reported a 42% year-over-year revenue growth rate in 1QFY22. </li>
<li>We were impressed with subscription revenue growth, lower-than-expected loss, customer expansion, and efficient SaaS metrics. </li>
<li>We analyzed multiples of 50 publicly listed software companies with various growth profiles and split SaaS/Fintech companies into four growth groups.</li>
</ul>



Freshworks (FRSH US)  upgraded its revenue guidance to ~$502M at the top end for FY22 and reported a 42% year-over-year revenue growth rate in 1QFY22. 
We were impressed with subscription revenue growth, lower-than-expected loss, customer expansion, and efficient SaaS metrics. 
We analyzed multiples of 50 publicly listed software companies with various growth profiles and split SaaS/Fintech companies into four growth groups.


Freshworks: Solid 1Q and Strong Outlook Despite Delays With Closing Deals in Europe

<ul>
<li>Sequoia Capital India, one of the key shareholders of <a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a> , made notable insider purchases in March. This is the biggest insider buying since IPO in 2021. </li>
<li>According to SEC filings, venture capital firm acquired ~5 million <a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a>  shares at an average price of <strong>$17.38</strong> per share. </li>
<li>We believe that strong insider buying may indicate a bottom in <a href="https://www.smartkarma.com/entities/freshworks-inc" target="_blank" data-smartkarma-citation="entities:34147:1" rel="noopener">Freshworks (FRSH US)</a>  stock after significant multiple compression in the technology software sector. </li>
</ul>


Sequoia Capital India, one of the key shareholders of Freshworks (FRSH US) , made notable insider purchases in March. This is the biggest insider buying since IPO in 2021. 
According to SEC filings, venture capital firm acquired ~5 million Freshworks (FRSH US)  shares at an average price of $17.38 per share. 
We believe that strong insider buying may indicate a bottom in Freshworks (FRSH US)  stock after significant multiple compression in the technology software sector. 


Sequoia Capital India Acquired ~$87 Million Worth Of Freshworks Shares In March

<ul>
<li>We are moving our PT to $26 by applying a 14x multiple to CY22 revenue estimate of $491M, which we believe is fair given lower implied CY22 growth. </li>
<li>Freshworks has resolved the litigation filed by Zoho Corporation regarding trade secret misappropriation against Freshworks, eliminating key risk factor for investors.</li>
<li>Freshworks crossed the $400M ARR mark in the quarter ended Dec-21, and quarterly revenue exceeded $100M for the first time. </li>
</ul>


We are moving our PT to $26 by applying a 14x multiple to CY22 revenue estimate of $491M, which we believe is fair given lower implied CY22 growth. 
Freshworks has resolved the litigation filed by Zoho Corporation regarding trade secret misappropriation against Freshworks, eliminating key risk factor for investors.
Freshworks crossed the $400M ARR mark in the quarter ended Dec-21, and quarterly revenue exceeded $100M for the first time. 


Freshworks: Six Months Post-IPO. Valuation Update

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

RateGain Travel Technologies / Equity Capital Markets

RateGain Travel Technologies (RATEGAIN IN)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rategain-travel-technologies" target="_blank" data-smartkarma-citation="entities:35265:1" rel="noopener">RateGain Travel Technologies (1920810D IN)</a> is looking to raise up to US$177m in its upcoming India IPO.</li>
<li>The deal will comprise a mix of primary and secondary shares, where the Promoters and a Pre-IPO investor, Wagner, are looking to pare down their stakes. </li>
<li>In our view, this listing being the first SaaS firm out of India, could garner investor interest which would aid listing sentiment as well.</li>
</ul>



RateGain Travel Technologies (1920810D IN) is looking to raise up to US$177m in its upcoming India IPO.
The deal will comprise a mix of primary and secondary shares, where the Promoters and a Pre-IPO investor, Wagner, are looking to pare down their stakes. 
In our view, this listing being the first SaaS firm out of India, could garner investor interest which would aid listing sentiment as well.


RateGain Travel Technologies IPO - First SaaS Listing in India and Could Be a Recovery Play

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<ul>
<li>Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product Freshworks has assembled a one-stop-shop for SMB customers for customer service, ITSM and CRM tools.</li>
<li>Its approach is to provide enterprise grade products at a ~25% discount to larger competitors.</li>
<li>The company has a similar approach to software as SolarWinds, which remains one of the most profitable software companies. </li>
</ul>


Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product Freshworks has assembled a one-stop-shop for SMB customers for customer service, ITSM and CRM tools.
Its approach is to provide enterprise grade products at a ~25% discount to larger competitors.
The company has a similar approach to software as SolarWinds, which remains one of the most profitable software companies. 


United States

Freshworks Inc. provides software as a service platform that enables small and medium-sized businesses to support customers through e-mail, phone, website, and social networks. The Company offers multi-product support, a knowledge base, self-service portal, community forums, and tools to leverage mainstream social media for customer support. Freshworks serves customers worldwide.

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Freshworks (FRSH US)

Freshworks: Solid 1Q and Strong Outlook Despite Delays With Closing Deals in Europe

Freshworks reported solid 1QFY22 earnings results and raised outlook for FY22. We believe the company may sustain 30%+ subscription revenue growth...

Andrei Zakharov

Sequoia Capital India Acquired ~$87 Million Worth Of Freshworks Shares In March

We maintain our bullish view on Freshworks and see notable insider buying as a strong interest among key shareholders, including Sequoia Capital India

Andrei Zakharov

Freshworks: Six Months Post-IPO. Valuation Update

Our new price target of $26 (vs. prior $47) is based on relative value methodology and implies ~39% upside, what is below IPO price of $36 per share

Andrei Zakharov

RateGain Travel Technologies IPO - First SaaS Listing in India and Could Be a Recovery Play

RateGain Travel Technologies (1920810D IN) is looking to raise up to US$177m in its India IPO. The listing will be the first SaaS listing in India.

Clarence Chu

Recent IPO Insights: Freshworks

Freshworks has assembled a one-stop-shop for SMB customers looking for customer service , ITSM and CRM tools priced at a ~25% discount to larger...

Aaron Gabin

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