"Last weekend was crazy," Girish Mathrubootham means it. An estimated 600 Indian SAAS (software-as-a-service) firms and their 2.5 billion dollars with exposure to Silicon Valley Bank were on the line when the bank failed. Later, the US Government decided to bail depositors out. While these companies can breathe easy now, the Freshworks co-founder and CEO said the implications of the event may be far-reaching.

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"The SVB situation could have a cascading effect, and we are already seeing more banks impacted," said Girish, in an exclusive chat with CNBC-TV18, "From an Indian standpoint, many start-ups parked funds with SVB since the bank was startup-friendly." He added, “Many founders were worried; some founders I know managed to move their money and are hopefully parking it somewhere safe."

Amid the uncertainty, Freshworks released a press statement, reassuring stakeholders that its exposure to the SVB situation was only “minimal relative to (its) overall balance sheet”. However, the overall situation is emblematic of the bleak time for start-ups, SAAS firms included.

“I’m not an expert, so I don’t know how long these times will last for start-ups, but quality start-ups will always get funding and none of the fundamentals will change,” said Girish, “At Freshworks, we want to be cautious through 2023 because we don’t see any improvement in the macros anytime soon. We hope that by the end of this year or the next one will be better.”

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New football academy takes shape

Over the weekend, Girish began a new chapter in his personal passion project. After having spent the last few years mulling over expanding FC Madras, his football academy for early-stage football talent that he started in 2017, the Freshworks CEO unveiled a new 15-acre facility outside Chennai.

Taking CNBC-TV18 on a tour of his three football courts, sports gallery, state-of-the-art gym, locker rooms, hostel blocks and classrooms among other facilities at the academy, Girish said his dream of “finding the next Messi from Madras” remained alive and well. The FC Madras academy has roped in the Indian cricket team’s former data analyst, CKM Dhananjai, to oversee performance analysis.

“I have spent Rs 100 crore on building phase one of the football academy from my personal charity fund,” said Girish, “The charity will fund football training, education, accommodation and food for the students. We have enrolled 55 children in the elite programme and are ramping enrollments to 75 by June.”

‘Freshworks will keep ensuring operational efficiency’

Back at Freshworks, however, it hasn’t exactly been smooth sailing. In December, the company announced that it was trimming its workforce by 2 percent, which translated to 90 employees being out of work. Late last week, news emerged that the company had conducted another round of layoffs, with no clarity on how many employees had seen their roles turn redundant.

Girish said that the trimming was done to enhance operational efficiency. “In fact, if I recall the numbers correctly, we hired 1,800 employees last year,” he added, “But growth means overlapping roles that need reorganization. We always look for efficiencies and will do the right thing.”

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‘Incorrect to say we don’t have a CTO’

Recently, Freshworks announced the departure of its long-time Chief Technology Officer (CTO) and the company’s co-founder Shan Krishnamurthy in September 2022. The company has since not formally appointed a CTO to replace Shan. Girish, however, said it was incorrect to claim the company did not have a CTO.

“How do people from the outside decide that we don’t have a CTO? Shan is a good friend and my co-founder for over a decade now. We also worked together for eight years before starting the company,” said Girish, “After our IPO, he expressed his desire to take a break and drive around India. I convinced him to wait for more time and not exit the company immediately. Eventually, we decided it was time for him to have his break.”

He added, “Shan is a fantastic architect who likes to solve complex problems, and we respected his decision. Each of our business units has an architect who can do the role of a CTO. So, it is incorrect to make a statement claiming that we don’t have a CTO.”

Freshworks reported revenues of $498 million in 2022, a YOY growth of 34 percent. The company has provided a revenue guidance of between $575 million and $590 million for 2023.

However, Girish admitted that the company was can expect to see “some pressure in expansion” this year. “Our focus is going to be to land new logos, focus on larger accounts and cross-sell expansion,” he signed off.

(Edited by : Anushka Sharma)