Executive Chairman Girish Mathrubootham divests 2.5 million shares amid organizational changes and improved financial outlook, marking his third major stock sale in 2024
In a significant development at Freshworks (NASDAQ: FRSH), co-founder and Executive Chairman Girish Mathrubootham has sold approximately 2.5 million shares of Class A common stock, worth $39.6 million, according to recent SEC filings. The transactions, executed between December 18-19, 2024, saw share prices ranging from $15.33 to $16.50.
This latest divestment comes at a pivotal time for the SaaS company, which has been implementing substantial organizational changes while maintaining strong revenue growth. The sale represents Mathrubootham’s third major stock transaction in 2024, following earlier sales of $41 million in September and $9.6 million in February.
“The recent share sale by Mathrubootham reflects normal portfolio management activities by company insiders,” says Rajesh Menon, Partner at Venture Capital firm Matrix Partners India. “What’s more telling is Freshworks’ continued execution on its growth strategy while improving operational efficiency.”
The timing of the sale coincides with several strategic shifts at Freshworks. Earlier this year, the company’s board canceled Mathrubootham’s CEO Performance Award of six million stock units, originally granted in 2022, citing changing macroeconomic conditions. Instead, he received a new annual long-term equity incentive award valued at $19 million.
Freshworks has demonstrated resilience in challenging market conditions, reporting a 22% year-over-year revenue growth to $186 million in Q3 2024. The company has raised its full-year revenue guidance to between $713.6 million and $716.6 million, up from previous estimates of $707-713 million. Notably, net losses decreased to $25.9 million in Q3, compared to $31.03 million in the same quarter last year.
The company recently announced two major initiatives: a global workforce reduction affecting 660 employees and a $400 million share buyback program. These moves signal a strategic pivot toward operational efficiency while maintaining growth momentum.
“Freshworks’ recent actions, including the layoffs and buyback program, indicate a mature approach to balancing growth with profitability,” notes Sanjay Swamy, Managing Partner at Prime Venture Partners. “This evolution is characteristic of companies transitioning from high-growth startups to established public entities.”
The developments at Freshworks hold broader implications for India’s SaaS ecosystem. As one of the first Indian SaaS companies to go public on NASDAQ, Freshworks’ performance and strategic decisions are closely watched by industry observers and emerging SaaS startups.
For the Indian startup ecosystem, Mathrubootham’s continued involvement in early-stage investments through Together Fund, which he co-founded in 2021, demonstrates the recycling of capital and expertise back into the ecosystem. The fund, which raised $150 million in its second corpus in 2022, focuses on supporting Indian SaaS entrepreneurs.
