Cloud Stocks: Zendesk, Freshworks Focus On Marketplaces And Integrations

According to an Allied Market Research report, the global complaint management software market is expected to grow at 11% CAGR to reach $8.3 billion by 2026 from $1.93 billion in 2018. Zendesk (NYSE: ZEN), and India-based Freshworks are key players in the market. Zendesk recently announced its fourth quarter results that surpassed market expectations.

Photo by DMP Alarms/Flickr.com

Zendesk’s Financials

Zendesk’s Q4 revenues grew 33% to $229.9 million, ahead of the market’s forecast of $227.6 million. GAAP net loss was $36.2 million. Adjusted EPS of $0.10 was in line with the Street’s estimates.

For the full fiscal year 2019, revenue grew 36% to $816.4 million. GAAP operating loss was $163 million and non-GAAP operating income was $26.6 million.

For the first quarter, Zendesk expects revenues of $237-$242 million, compared with the market’s forecast of $237.8 million. It expects to end the year with revenues of $1.05-$1.07 billion, which was in line with the market’s forecast.

Zendesk’s Marketplaces Focus

In 2018, Zendesk had acquired Mountain View-based Base, which was known for its sales platform. Bose offered a single stop solution called Apollo, which focused on improving rep adoption rates and data capture across devices. Apollo could analyze big data trends in real-time and deliver actionable, quantifiable insights to drive performance.

Prior to the acquisition, Base had raised $52.9 million funding from Index Ventures, RRE Ventures, OCA Ventures, Jumpstart Ventures, I2A Fund, Hyde Park Venture Partners, and Tenaya Capital. Terms of the acquisition were not disclosed. Zendesk plans to leverage Base’s product to build deeper integrations with its own products so sales and service could collaborate more easily. Following the acquisition, Base was rebranded as Sell.

Recently, Zendesk announced plans to launch a new product called Marketplace for Sell. Similar to Salesforce’s AppExchange, Marketplace for Sell will grant sales teams with access to a central place where they could access critical customer information from various tools directly within the Zendesk Sell interface to create a single, comprehensive profile of the prospective customer.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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