SAN MATEO, Calif. (Diya TV) — Freshworks, a major player in software-as-a-service listed on Nasdaq, witnessed a significant shift as its founder, Girish Mathrubootham, stepped down from the position of chief executive officer, effective immediately. The company’s shares plummeted by 25% in response to this news.

The Chennai and San Mateo, California-based SaaS firm, renowned for its CRM software tools catering to enterprises, announced Dennis Woodside, the current president, as its new CEO. Mathrubootham will transition to the role of executive chairman at Freshworks.

Mathrubootham conveyed his decision to employees in an email, emphasizing his belief in the company’s vision and future. The unexpected announcement triggered a substantial selloff in Freshworks’ stock, with shares declining by nearly 25% during after-market hours trading on Nasdaq.

In explaining his decision, Mathrubootham highlighted his desire to focus on the long-term product vision and invest in the company’s presence in India. Freshworks, founded in Chennai in 2010, initially targeted small and medium businesses with its CRM software. Over the years, the company has expanded its market reach and now serves over 67,000 customers globally.

The transition in leadership follows the cancellation of a performance-based stock award of 6 million shares to Mathrubootham by the board of directors earlier this year. The cancellation was attributed to macroeconomic conditions that affected the stock price performance.

Freshworks recently reported a net loss of $23.3 million in the first quarter of 2024, coupled with a revenue increase of about 20% year-on-year to $165.1 million. Despite challenges such as slower growth in the SMB segment, the company remains optimistic about its future prospects.

Woodside, who joined Freshworks as president in 2022, brings a wealth of experience to his new role. With a successful track record in leadership positions at companies like Impossible Foods, Dropbox, and Google, Woodside is well-equipped to lead Freshworks into its next phase of growth.

In addition to the leadership transition, Freshworks announced its acquisition of US-based startup Device42 for $230 million, marking its first-ever acquisition. The move reflects the company’s commitment to expanding its product offerings and strengthening its position in the market.

Looking ahead, Freshworks anticipates revenue growth in the range of $695-705 million for the full year 2024, with adjusted profit expected to be between $58 million and $64 million. Despite the challenges posed by macroeconomic conditions, the company remains focused on delivering value to its customers and driving innovation in the SaaS industry.