Freshworks to Acquire Torii to Expand AI Spend Governance

Nasdaq-listed Freshworks has signed a definitive agreement to acquire Torii, a SaaS management platform, as it looks to expand its Freshservice offering into software spend management and artificial intelligence (AI) governance. The transaction is expected to close in the fourth quarter of fiscal 2026, subject to customary closing conditions. The financial terms of the deal have not been disclosed.

Announced on October 12, 2026, the acquisition is aimed at helping businesses monitor software usage, track AI related expenditure and improve oversight of their technology infrastructure.

• Freshworks Targets AI Cost Visibility With Torii

Founded in 2017, Torii helps enterprises discover and manage software applications, licences, users, access permissions and AI-related spending. Its platform tracks AI consumption at the token level, attributes usage to individual employees and teams, forecasts expenditure and enables organisations to establish usage limits.

The integration is expected to extend these capabilities into Freshservice, Freshworks’ IT service management platform. The combined offering aims to give IT, finance and security teams a unified view of applications, identities, software usage and associated costs.

For businesses adopting multiple AI tools, this could help identify underused software licences, detect unexpected spending increases and reduce the security risks associated with unmanaged applications.

“Modern IT teams are being asked to govern more of the business than ever, with less visibility into what it costs,” said Freshworks CEO and President Dennis Woodside in the company’s announcement.

Torii CEO Uri Haramati said the combination aims to address fragmented visibility across IT, finance and security teams, giving organisations a more consistent view of software and AI usage.

• Freshworks Reports $237.4 Mn Revenue in Q2 2026

The acquisition comes as Freshworks continues to expand its AI-led product portfolio while pursuing growth and profitability.

For the second quarter ended June 30, 2026, the company reported revenue of $237.4 million, representing 16% year-on-year growth. It also recorded GAAP net income of $3.2 million, compared with a net loss of $1.7 million in the year-ago quarter.

Freshworks reported GAAP operating income of $6.1 million during the quarter, against an operating loss of $8.7 million a year earlier. Its adjusted free cash flow stood at $57.7 million.

These results provide financial context for the acquisition, although Freshworks has not disclosed how much it will pay for Torii or quantified the transaction’s expected contribution to revenue or profitability.

• Why AI Spend Governance Matters for Enterprises

As AI tools become embedded in everyday business operations, organisations face a growing challenge: tracking not only which applications employees use but also how much those tools consume and cost.

Unlike conventional software subscriptions, some AI services charge according to usage, including tokens processed. Without centralised oversight, spending can become difficult to allocate across teams or forecast accurately.

For Indian startups and enterprises, this creates a practical consideration. As businesses scale their use of AI assistants, application programming interfaces and automated workflows, software governance is becoming part of cost management rather than solely an IT responsibility.

Freshworks’ proposed acquisition of Torii reflects this shift. By bringing software discovery, usage monitoring and AI expenditure tracking closer to IT service management, the company is seeking to make technology costs more visible and manageable.

The transaction remains subject to closing conditions. Its longer-term impact will depend on how effectively Freshworks integrates Torii’s capabilities and how customers respond to the combined offering.

Source website: Freshworks