Freshworks, a company that provides customer service software and automation tools for businesses, has confirmed that it’s raising $150 million in a series H round of funding co-led by Alphabet’s CapitalG, Sequioa Capital, and Accel.
This takes the company’s total funding to nearly $400 million and follows its $100 million series G round last July that included the same three investors. This time around, however, Freshworks is valued at $3.5 billion, more than double its previous valuation.
It’s worth noting that Freshworks hasn’t officially closed the fresh round of funding yet, having merely signed “definitive agreements” with the aforementioned investors — it doesn’t expect the financing to close until the end of the year. It appears the reason Freshworks preannounced the funding was due to a leak last week on an Indian news site that reported the news via anonymous sources.
The story so far
Founded out of Chennai, India in 2010, Freshworks offers a cloud-based Freshdesk product to help companies track customer conversations, manage tickets, and collaborate with their broader team. In fact, Freshworks was known as Freshdesk before it rebranded in 2017 to reflect an expansion into all manner of offerings, including live chat with Freshchat; sales CRM via Freshsales; call center management through Freshcaller; HR software with Freshteam; and IT service management smarts, courtesy of Freshservice.
Although the bulk of Freshworks’ staff is still based in India, its global HQ is now in San Mateo, California, with additional hubs in London, Berlin, and Sydney. The company counts more than 2,000 employees globally.
Alongside the funding, Freshworks is announcing a new product it’s calling “customer-for-life cloud,” which creates a common data bridge spanning its various products. It’s all about giving companies a “360-degree view” of their customers’ activities across sales, marketing, and customer support, which may be useful for up-selling, cross-selling, or retention.
“Since Freshworks’ founding, we have been at the forefront of democratizing software for the entire organization — and we’re continuing that tradition by using the most advanced cloud technologies to ensure that software delivers for the entire organization and puts the ‘customer’ back into CRM,” said Freshworks CEO and founder Girish Mathrubootham.
The AI element
As with just about every industry, artificial intelligence, machine learning, and automation are infiltrating the customer engagement sphere in a big way. Just yesterday, Google announced a major upgrade for CallJoy, an automated telephone-based customer service agent, while countless startups continue to raise big bucks to develop AI for customer support teams. Freshworks is embracing this trend wholeheartedly.
Freshworks AI, or “Freddy” as its known, serves up predictive insights and helps automate repetitive tasks for customer service, sales, and marketing teams.
“Freddy AI is woven into all of Freshworks’ products and is a key differentiator of our customer-for-life cloud platform,” Freshworks’ SVP of engineering STS Prasad told VentureBeat. “Our key features use Freddy — lead-scoring, self-service chatbots, ticket prioritization and routing, customer health score predictions, and NLP-driven analytics.”
Freddy essentially scans myriad data streams from across Freshworks’ products and “learns” from customer interactions — for example, “deal insights” guides sales teams toward deals that are most likely to close so they can double down and see it over the line.
Customer service agents can also enable “field suggester,” which uses historical support data to understand how customer agents have categorized tickets and predict the most likely classification for new tickets — it’s all about helping cut down on time through manual processes.
In the core Freshdesk product, there are also “agent assist” bots designed to onboard new customer service agents and help them resolve issues.
Automation for the people
With another $150 million in the bank, Freshworks said it plans to accelerate its global expansion and invest in its integrated software-as-a-service (SaaS) platform. Moreover, the funding will also be used to enhance its various automation smarts, including expanding its teams across India and the U.S., while we could see some more acquisitions involving younger startups.
“With this funding we are making significant R&D investments in AI and ML, building out our expert teams in Chennai, Bangalore, San Mateo, and Hyderabad,” Prasad continued. “AI and ML is a rapidly evolving field, and there will [also] be innovations from many startups. We will opportunistically look at acquisitions that provide best of breed, products, tech, and talent.”
Freshworks has already made moves on that front — back in May it snapped up customer service management software company Natero, which leverages machine learning to help businesses predict and prevent customer churn.
It also seems clearer than ever that this concerted push into automation constitutes part of a two-way feedback loop — as industry develops new AI-enabled features to help companies improve their operations, companies come back asking for more of the same.
“In the past 12 months, we’ve seen a dramatic increase in the number of enterprise RFPs (request for proposals), which include specific AI-related features requests,” Prasad added. “Most of these are in the form of smart chatbots for support, lead-scoring for sales and marketing, and pipeline predictions for sales.”
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