Two business-to-business technology firms made their public debuts today, and both stocks popped, as Freshworks Inc.’s shares rose 32% by market close, and Toast Inc. shares shot up 56%.

And there are more coming in tech. Money transfer service Remitly Inc. and customer engagement software provider EngageSmart LLC are expected to go public Thursday.

However, not every company is finding it easy to do an initial public offering. The language learning app Babbel, offered by the German firm Lesson Nine GmbH, was expected to go public Friday but apparently has called it off after tepid investor interest.

Freshworks has built an information technology and customer relationship management software-as-a-service platform. It priced its IPO at $36 per share, above the target range, raising $1.03 billion at a valuation of more than $14 billion.

The company pitches itself as an innovative customer management and engagement platform for businesses, helping them acquire customers, close deals and maintain those relationships. It’s often said to be a rival to the original SaaS CRM giant Salesforce.com Inc. as well as SAP SE and Oracle Corp., but Freshworks argues its products are far more user-friendly, easier to implement and less expensive. As a result, the company has a solid footing with midmarket businesses, with more than half of its annual recurring revenue coming from firms with 250 or more employees.

Freshworks claims a customer base of 50,000, including the likes of Bridgestone Corp., Delivery Hero SE, ITV plc, OfficeMax, Vice Media, TaylorMade Golf Co., Cisco Systems Inc., the U.K. National Services and Honda Motor Co. Ltd. The company was previously valued at $3.5 billion following its final $150 million round of venture capital funding in November 2019.

In its filing with the Securities & Exchange Commission prior to the IPO, Freshworks said it had revenue of $169 million in the first half of the year, up 53% from a year ago. It’s still unprofitable, though, with a loss of $8.9 million during that period.

Freshworks has said it will use the funds from the IPO for general corporate purposes such as working capital, capital expenditures and operating expenses. It may also use some of the cash to fund acquisitions of complementary businesses.

Constellation Research Inc. analyst Holger Mueller said Freshwork’s ambition is both encouraging and reassuring, because the CRM software segment can benefit from a good dose of innovation.

“Salesforce has not faced a serious challenge in over a decade, and that isn’t good for anyone — enterprises, the future of CRM and indeed even Salesforce itself,” Mueller said. “It will be interesting to see what Freshworks attempts as it bids to grab more market share.”

Mueller’s colleague Liz Miller said Freshworks could well be the first of several CRM upstarts making a run at Salesforce.

“This is a new era of service-centric CRM where flexible platforms bind how a business engages with customers by better engaging with employees and teams,” she said. “Suites like this challenge the status quo of CRM by making it easy to use, easy to afford and easy to scale.”

Meanwhile, Toast is more of a financial technology firm, selling a point-of-sale software system for restaurants that allows diners to order online, over the phone or in person. Restaurants can also use the data the platform generates to craft loyalty and marketing programs.

The company raised about $870 million from its IPO, selling shares at $40 each. Toast previously said it expected to price the offering at $34 to $36, following an initial range of $30 to $33. The stock closed at $62.51, boosting Toast’s market cap to more than $31 billion.

Toast’s software enjoyed solid growth amid the COVID-19 pandemic as restaurants all over the world closed shop and switched to remote ordering and deliveries. In its SEC filing, Toast said its 2020 revenue jumped 24%, to $823.1 million, and in the second quarter of this year it almost tripled, to $424.7 million.

About 80% of that revenue comes from “financial technology solutions,” a term for the fees paid by customers for payment transactions. The rest of its revenue is generated by hardware, subscription services and professional services.

Toast says its platform is used by more than 48,000 restaurants and had processed $38 billion in gross payments over the previous 12 months. Like Freshworks, though, the company is still unprofitable, with its loss in the first six months of the year doubling to $235 million.

Photo: Freshworks/Facebook