Chennai/New Delhi: Early-stage valuations in India have not yet corrected, Girish Mathrubootham, founder and chief executive of Software as a Service (SaaS) firm Freshworks, told ET.

He was referring to the ‘funding winter’ that many believe has gripped the Indian startup ecosystem.

Mathrubootham is the ET Entrepreneur of the Year 2021.

He said the startup growth story in India is a durable, long-term opportunity.

“There are funds that have raised a lot of money and India’s seeing a lot of high-quality startups,” he said. “Early-stage valuations in India have not corrected. Maybe it will come down a little but right now, it’s still quite expensive.”

Mathrubootham also spoke of the importance of sustainable growth in the context of a number of startups handing out pink slips to employees lately. Sustainability is crucial for the ecosystem to thrive as it consists of funded startups and bootstrapped startups, he said, warning that one must not destroy the ecosystem by “throwing too much money”.

“When we hire somebody, we look at it as a responsibility that we take very seriously,” he said. “We don’t throw money at problems as if there is no tomorrow. My advice to startups is when you raise money, don’t do stupid things. Run it like a proper business. Even if the valuations are expensive, stay prudent and build a sustainable business.”

On the spate of corporate governance issues that have come to light lately in the startup community, Mathrubootham said that there was a lot to learn from large legacy players that have stood the test of time in corporate India. He said the startup ecosystem needs to incorporate what makes the Tata group or TVS group forces to reckon with.

“We have to take pride in building companies that are not all about growth or revenue numbers but about building long-lasting, enduring companies,” he said. “That’s where we have to learn from the role models in corporate India. They are built for 100-years plus. We need that kind of behaviour in the startup ecosystem. We need more role models.”

From a business perspective, Mathrubootham said this was going to be the decade of India as a product nation.

FreshWorks is bullish about India and believes there is much more potential to be unlocked, he said.

“We are going to increase our efforts in India,” he said. The decision to elevate Karthik Rajaram as vice president was also to focus more on India as a market, he added.

“We have several exciting customers in India and we can see that India is actually leading in fintech; we’re seeing a lot of dev-tools startups growing in India…also, the established enterprise companies are starting to warm up to more SaaS technology.”

From an India standpoint, Mathrubootham said three major events have shaped the narrative.

These include Flipkart being acquired by Walmart, the Zomato IPO and Freshworks’s own public market listing on Nasdaq.

He said the Freshworks listing has opened the floodgates for a lot of other startups to seriously pursue listing as an option.

“There are so many founders who are thinking of going public,” he said. “I am talking to many Indian founders who want to pick my brains on the experience of hiring bankers, and how do they know whether the company is ready or not. So, I think we’re going to see all of that (companies going public). And it’s really exciting, and hopefully some from Chennai, too!”

On whether the pressure of being at the helm of a listed company gets to him sometimes, Mathrubootham laughed and drew an interesting analogy.

He said being a VC-funded startup is like being a bachelor. “And at some point, you realize that you cannot be a bachelor all your life and you decide to become responsible and start a family. Going public is like that,” he said.

Calling the pressure a privilege, he added that Freshworks had the opportunity to build an iconic product company from India.

“This is like a once-in-a-lifetime opportunity for me and the entire FreshWorks team. We are all super pumped and excited about having the opportunity to run that journey.”

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