Freshworks, a publicly traded SaaS company, has disclosed in an SEC filing that it is acquiring Device42, a U.S.-based startup, for $230 million. Alongside this acquisition announcement, Freshworks has revealed a leadership change, with founder Girish Mathrubootham stepping down as CEO. Dennis Woodside, who joined Freshworks as president in September 2022 and previously served as CEO of Motorola Mobility, will now assume the role of CEO, while Mathrubootham transitions to the position of executive chairman.
Device42 specializes in helping companies manage their IT infrastructure and gain insights into their systems, ranging from mainframes to cloud platforms. It has also expanded its offerings to include carbon emissions tracking. By providing a comprehensive and real-time inventory of IT assets, including hardware, software, and network components, Device42 aims to help organizations optimize resource allocation and gain broader visibility into their systems.
This acquisition marks Freshworks’ first major purchase since becoming a public company in 2021. Mathrubootham highlighted Device42’s enterprise-grade IT asset management capabilities, which are expected to enhance Freshworks’ Freshservice offering. The transaction is anticipated to close later in Q2, after which the two companies will operate as an integrated team.
Device42 had previously raised $38.5 million from investors such as LongRiver Investments and Elm Street Ventures. Mathrubootham, a prominent figure in India’s SaaS industry, founded Freshworks in Chennai in 2010. Despite his transition to executive chairman, Freshworks’ shares experienced a 25% decline after the market closed, potentially impacting the firm’s market capitalization.
Analysts noted that the leadership transition was part of planned succession planning, allowing Mathrubootham to focus on long-term product strategy and AI initiatives. While there were concerns about the leadership change, analysts expressed confidence in Woodside’s capabilities and his role in building Freshworks’ Enterprise GTM (Go-To-Market) strategy.
Freshworks reported its first-quarter earnings, highlighting ongoing challenges in its small and medium-sized business and customer service segments. However, the company remains optimistic about the adoption of its AI-powered solutions, including Freddy AI and Co-Pilot, across various customer segments.