SCHEDULE 13D: Peak XV Partners Group Reduces Stake in Freshworks Inc. to 5.0% Through Recent Share Sales

A group of investment entities under Peak XV Partners has significantly reduced its beneficial ownership in Freshworks Inc. to approximately 5.0% through a series of open market share sales in December 2024 and January 2025.

Summary

• The filing is an Amendment No. 3 to a Schedule 13D, reporting changes in beneficial ownership of Freshworks Inc. Class A Common Stock by a group of Peak XV Partners entities.
• The reporting group now beneficially owns an aggregate of 11,704,553 shares, representing approximately 5.0% of Freshworks Inc.'s Class A Common Stock outstanding as of November 1, 2024.
• This represents a reduction from previous holdings, as the group completed sales of 2,988,639 shares through open market transactions between December 9, 2024, and January 28, 2025.
• The sales occurred at prices ranging from $17.0000 to $19.2000 per share.
• The reporting persons include Peak XV Partners Investments V, Peak XV Partners V Ltd., Peak XV Partners Principals Fund V LTD, Peak XV Partners Management V Ltd., Peak XV Partners Growth Investments III-1, Peak XV Partners Growth Fund III Ltd., Peak XV Partners Principals Growth Fund III Ltd., and Peak XV GF Management III Ltd.
• All reporting entities are organized under the laws of Mauritius.
• The new Schedule 13D filing was required due to new filing requirements and the previous Original Filer (SC US (TTGP), Ltd.) no longer being an affiliated entity of the Reporting Persons as of June 6, 2023.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative. While the filing is a factual disclosure of a legal requirement, the significant reduction in stake by a major institutional investor group (Peak XV Partners) through open market sales could be perceived by the market as a bearish signal, potentially indicating a lack of conviction or a strategic rebalancing away from Freshworks Inc. This type of large-scale selling by an early investor is often viewed with caution by other market participants.

Negatives

• A significant reduction in stake by a large institutional investor group (Peak XV Partners) could be perceived negatively by the market, potentially signaling a lack of long-term conviction or a strategic portfolio rebalancing away from Freshworks Inc.
• The sale of nearly 3 million shares over a short period could exert downward pressure on the stock price.

Future Outlook

The document does not contain any forward-looking statements or guidance from Freshworks Inc. or the reporting persons regarding the company's future performance or strategic direction.

Industry Context

This filing primarily reflects a change in the ownership structure of Freshworks Inc. by a specific institutional investor group. It does not provide broader insights into industry trends or competitive dynamics within the software or SaaS sector, beyond indicating a large investor's decision to reduce its stake in a company operating in this space.

Stakeholder Impact

• Shareholders: Existing shareholders may view the reduction in stake by a major institutional investor negatively, potentially leading to decreased confidence and downward pressure on the stock price. New investors might see an opportunity if they believe the selling is unrelated to company fundamentals.
• Company (Freshworks Inc.): The company might face questions from investors regarding the reasons behind the significant stake reduction by a long-term investor.

Next Steps

• The Reporting Persons undertake to provide, upon request by the Securities and Exchange Commission staff, full information regarding the number of shares of Class A Common Stock sold at each price.

Key Dates

Recommendation

Keywords

Freshworks Inc., Peak XV Partners, Schedule 13D, Share Sales, Beneficial Ownership, Institutional Investor, Equity Stake, SEC Filing, Class A Common Stock, Mauritius