Freshdesk raises $50 million to battle Zendesk

San Francisco software company Freshdesk has raised $50 million from investors as the startup aims for international expansion.

The funding round, a Series E, was led by Google Capital, Google’s investment arm that targets later-stage companies; venture firm and repeat investor Accel Partners; and hedge fund Tiger Global Management. Freshdesk, founded in 2010, will use the money to add features to its product to appeal to more millennials, an increasingly important consumer sector, said company president Dilawar Syed. The round is the company’s largest yet and brings its total funding to $95 million.

“We know we need to scale our business faster and invest in our product,” Syed told Forbes.

Freshdesk makes cloud-based customer service software for businesses, and offers email, phone call, online forums, apps and social media feature to allow customer service agents to connect with customers. It has roughly 40,000 customers across the world, including Honda, Hugo Boss, University of Pennsylvania and The Atlantic. It has a new London office and another in Australia coming soon.

In addition to doubling its clients, the company has more than doubled its employees to about 350.

The fundraising positions Freshdesk for an initial public offering, and an opportunity to pull away from Zendesk, another San Francisco customer service software startup that has posed increased competition over the last year. Zendesk has more customers — about 52,500, according to its most recent financial filing — and now trades at a market cap of about $2 billion.

It raised $100 million in its IPO last year at a $631 million valuation.


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