Fabien Pinckaers, CEO of Belgian enterprise software startup Odoo.
Audu
Odoo, a new startup sap In the field of enterprise software, by letterventure capital funds and Sequoia Capital.
The Belgium-based company develops open source enterprise resource planning software and offers more than 80 applications on its platform, providing enterprise tools for accounting, customer relationship management, human resources, e-commerce and website building.
Odoo CEO and co-founder Fabien Pinckaers told CNBC this week that his company doesn’t need to raise any major capital because it’s “cash profitable” and is growing revenue at 50% a year. Year. Enterprise resource planning “is still a very fragmented market,” he said.
“The reason why everyone fails (in this market) is that it’s quite complex,” Pinkars told CNBC. “Small companies have complex needs, from accounting to inventory to website, e-commerce, point of sale. There’s a lot of it, And they don’t have the budget, they want something simple and affordable.”
“No one has managed to do both,” he added. “A complex product like SAP works well for large companies. But it’s complex and expensive.”
Andrew Reed, a partner at Sequoia Capital, added that Odoo is entering a market that “just takes more gestation time than most startups because the core system is very complex and making it easy to use for small businesses and across countries is not easy.” thing.
humble beginnings
Reed said Odoo “is not a traditional Silicon Valley technology story.”
Pinckaers opened the company’s first office 22 years ago on a farm in Belgium. It was all he could bear at the time. Later, as the company started bringing in revenue, Odoo opened two offices in Belgium to house the company’s R&D, support, and technical teams.
Today, Pinkars lives in India with his family. He’s been living there for a year, working to expand the company’s presence there, hiring more people, beefing up marketing and growing Odoo’s overall partner network.
Odoo billed €370 million last year and expects to top €650 million by 2025 – after which it hopes to hit the €1 billion milestone by 2027. The sum of invoices for a given year – is Odoo’s preferred metric for tracking annual revenue performance.
Pinckaers said that currently about 80% of Odoo’s business comes from open source software, and the remaining 20% comes from paid software. Open source refers to software that allows users to access the underlying code (usually free), which they can then modify and tweak.
No rush for IPO
Although Odoo is now IPO-ready, Pinckaers said he is in no rush to take the company public. If anything, staying private gives Odoo the flexibility to focus on long-term investments, he said.
Odoo’s private backers aren’t eager to take the company public either. Alex Nichols, a partner at Alphabet’s CapitalG, told CNBC he was not worried about “IPO timing,” adding that factors such as public market conditions were ultimately “beyond our control.”
Pinkars has grown the business to its present size largely through bootstrapping, growing without raising outside capital. For a decade now, Odoo hasn’t had to raise primary funding from investors, opting instead to let early investors and employees sell shares in secondary sales.
Odoo last received major funding in 2014, when it raised $10 million in Series B funding. Ahead of its latest second round of funding, Odoo was recently valued at €3.2 billion by investors.
Other backers of Odoo include the likes of private equity firm Summit Partners, Noshaq and Wallonie Entreprendre, which are all selling part of their stakes to CapitalG and Sequoia Capital as part of a €500 million investment announced on Wednesday.
Even after selling some of its shares, Summit remains the largest institutional shareholder in Odoo. Pinkars himself has never sold any of his personal stock.
