Freshworks, a publicly listed SaaS firm headquartered in San Mateo, has acquired U.S.-based startup Device42 for $230 million, as disclosed in an SEC filing. The acquisition marks Freshworks’ first since becoming a public company in 2021.
Alongside the acquisition announcement, Freshworks revealed that founder Girish Mathrubootham has stepped down as CEO to become executive chairman. Dennis Woodside, who joined Freshworks as president in September 2022 and previously served as CEO of Motorola Mobility, will take over as the new CEO.
Device42 specializes in IT asset management, providing companies with insights into their systems, from mainframes to cloud. It recently expanded its offerings to include carbon emissions tracking. Freshworks believes Device42’s capabilities will further strengthen its Freshservice offering.
“With more than 800 customers worldwide, Device42 provides enterprise-grade IT asset management capabilities, which we believe can further strengthen our Freshservice offering,” Mathrubootham told analysts on the earnings call Wednesday. “We have historically partnered with Device42 on large enterprise opportunities in the field. And after the transaction closes, we look forward to serving customers as one integrated team. We expect the transaction to close later in Q2,” he added.
Prior to the acquisition, Device42 had raised $38.5 million in financing from investors including LongRiver Investments and Elm Street Ventures. Mathrubootham, a key figure in India’s SaaS growth story since founding Freshworks in Chennai in 2010, will continue to serve on the company’s board.
Despite the CEO transition, analysts remain optimistic about Freshworks’ growth prospects, citing Woodside’s strong track record and the company’s continued optimism about the adoption of its AI-powered solutions, Freddy AI and Co-Pilot, across various customer segments.
Freshworks reported its first-quarter earnings on Wednesday, revealing continued weakness in its small and medium-sized business and customer service segments. However, the company remains optimistic about the long-term potential of its AI-powered solutions, which it believes will drive growth in the future.
