Open source has become a major force in the IT world, and today a startup that has built a profitable operation by developing business management software on the principle announces a significant secondary investment on the back of this growth.
Odoo – a Belgian provider of open source business software that ranges from inventory management and ERP to human resources and CRM software, marketing tools and more, some 30,000 in total – received $ 215 million from Summit Partners.
This is a secondary investment, which means Summit buys shares from existing investors (in particular Sofinnova Partners and XAnge). Odoo is profitable and has been for years, CEO and founder Fabien Pinckaers explained in an interview earlier, so he didn’t need to raise more money by giving more equity. He added that this investment values ââthe startup at more than 2 billion euros (or more than 2.3 billion dollars at current rates), making Odoo the first unicorn outside Wallonia, the region of Belgium where it is. based. This in itself is remarkable; it’s a sign of the evolving decentralization of the tech world beyond Silicon Valley.
This is the second time that Summit, which was one of Odoo’s first (equity) backers, has taken secondary stocks. The company made a similar investment of $ 90 million in 2019.
With 7 million users on its platform, Odoo is a prime example of the tremendous benefits of economies of scale in the most successful open source projects, but it also does so with a twist.
On the open source front, Odoo provides a free, open source version of its services, which Pinckaers says contains around 80% of all of its functionality. It then offers a paid and proprietary version of the product with the remaining 20% ââof functionalities (all the details on price here).
About 90% of Odoo’s customer base opt for the free tier, he said, with just 10% for the paid owner tier. But with 7 million users, that’s enough to run the business with a profit large enough that it can continue to invest in growth without giving up more equity.
What’s also remarkable is the way Odoo presents itself. While much of open source has been seen as the domain of developers and other members of the technical community, Odoo makes software on its platform that actually caters to others on the premises. work, not engineers.
âWe are one of the only exceptions to open source designed for non-technical users,â said Pinckaers.
It targets users both directly through its SaaS platform and through a large channel partner operation, where the channel partners will host the services themselves. His traction with these partners is strong, he added, due to the free nature of Odoo (which is not only a contrast to the SAPs, Microsofts, and Oracles of the world, but sometimes a much easier sell around. which a distribution partner can provide other paid services). There are now nearly 4,000 partners, he added, with 90,000 other individual community members contributing to the software on the Odoo platform.
The company has grown its revenue and customer base at a rate of 50% over the past 10 years (and 63% over the past 15 years – it has been in existence since 2005), and it now has 1,700 employees and plans to expand. ‘add 1,000 this year. Billing is expected to rise to 160 million euros in 2021. Pinckaers said Odoo’s next steps will be to continue developing the software it provides to users on its platform. Specifically, he focuses on e-commerce and website development, he said, two areas that he believes could benefit from more non-technical and user-friendly open source tools.
“We are delighted to support the Odoo team for this next phase of growth,” said Han Sikkens, Managing Director and Head of Europe at Summit Partners, in a statement. “We believe the future is bright and Odoo clearly has the potential to disrupt the market led by software giants like SAP, MS Dynamics and Oracle.” Sikkens joins the board with this round.