Freshworks Eyes Acquisitions Worth Millions, With AI Firms in Focus
U.S. software company Freshworks is preparing for a new wave of acquisitions as it looks to accelerate growth using its $800 million cash reserve, with a strong focus on artificial intelligence (AI) and employee experience software. CEO Dennis Woodside said the company has already held discussions with potential acquisition targets across several global markets.
Global AI Boom Drives Dealmaking
The company’s renewed appetite for mergers and acquisitions comes amid a surge in AI-driven dealmaking across the tech sector. According to J.P. Morgan, global M&A volumes rose 39% to reach $4.3 trillion in 2025, despite ongoing uncertainty linked to U.S. tariffs.
Woodside revealed that Freshworks has been evaluating acquisition opportunities in Israel, Europe, the United States and India. “I probably spoke with 50 companies in the last six months,” he told Reuters, highlighting the company’s aggressive pursuit of promising AI ventures.
Strong Indian Roots and Expansion Plans
Founded in Chennai, Freshworks offers cloud-based business software such as Freshdesk, a customer service platform, and Freshservice, an IT support solution. Both products already integrate AI tools designed to automate workflows and improve efficiency. The company competes with global leaders such as Salesforce and ServiceNow.
Woodside said India remains central to Freshworks’ growth strategy, noting that all its engineering teams are based there, representing 80% of its 4,500-strong workforce. “We would love to find our next acquisition target in India,” he added, citing easier post-merger integration as a key advantage.
Recent Acquisitions and Financial Strength
Freshworks, headquartered in San Mateo, California, projects double-digit revenue growth over the next three years. On Monday, the company announced its acquisition of incident management platform FireHydrant, following last year’s $230 million purchase of IT management software Device42.
With $813.2 million in cash, cash equivalents and marketable securities, Freshworks has the financial capacity to pursue “meaningfully larger deals,” though Woodside declined to specify the size of future acquisitions.
Competing in an Evolving SaaS Landscape
The company’s strategy aligns with broader industry trends, as AI-native startups challenge established software-as-a-service (SaaS) players through hyper-personalised tools. Despite a modest rebound in funding—Indian SaaS startups raised $1.8 billion in 2024, up from $1.3 billion in 2023—the figure remains well below the $4.4 billion seen in 2022, according to Venture Intelligence.
Woodside confirmed that Freshworks plans to continue expanding its Indian workforce, particularly in engineering, product development and design. “We’ll keep adding engineers through future acquisitions,” he said, without disclosing specific hiring targets.
with inputs from Reuters
