The transition of Mathrubootham to executive chairman was part of a planned succession, allowing him to focus on long-term product strategy and AI. Despite this, Freshworks' shares fell 25% after the announcement. The company, which competes with Salesforce, ServiceNow, Hubspot, and Zoho, ended trading on Wednesday with a market cap of about $5.3 billion. Freshworks reported continued weakness in its small and medium-sized business and customer service segments in its first-quarter earnings, but remains optimistic about the adoption of its AI-powered solutions.
Key takeaways:
- Freshworks, a SaaS firm, is acquiring U.S.-based startup Device42 for $230 million, according to an SEC filing.
- Freshworks' founder Girish Mathrubootham has stepped down as CEO and will become executive chairman. Dennis Woodside, former CEO of Motorola Mobility, will take over as CEO.
- Device42, which provides companies with insights into their IT infrastructure, is Freshworks' first acquisition since it became a public company in 2021.
- Shares of Freshworks fell 25% after the announcement, potentially erasing about $1.4 billion from the firm’s market cap.