Venture Capital

Sequoia buys Freshworks dip; SoftPOS is new big bet in payments

Madhav Chanchani

Pratik Bhakta

March 17, 2022 | 5 Min Read

The Crux newsletter this week. The venture-capital firm has snapped up a large number of shares of Nasdaq-listed Freshworks in recent weeks. What signal is it sending to the markets? Software-based payment solutions are helping merchants avoid the costs and hassles of traditional POS terminals

For SaaS major Freshworks, the joy of surpassing the market cap of old rival Zendesk was short-lived. Its market cap reached nearly $15 billion last November, but a share slide has brought it down to $4.7-4.8 billion. Zendesk is comfortably ahead again with a figure of $13.6 billion.

The reversal of fortune has happened in months. Just in September, the Chennai-based company had landed a market cap of $10 billion for its initial public offering. (It is listed on Nasdaq.) Bottom line: New investors are underwater, and it does not bode well for Indian SaaS players that the sector’s bellwether stock is underperforming.

Enter Sequoia: Some investors see this slump as an opportunity. In the past few weeks, Sequoia Capital has bought Freshworks shares worth about $95-96 million, which represents a stake of nearly 2%.

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