Alphabet’s VC arm backs little-known SAP rival Odoo, boosting valuation to $5.3 billion

Last Updated: November 20, 2024Categories: TechnologyBy Views: 99

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Fabien Pinckaers, CEO of Belgian-based project machine startup Odoo.

Odoo

Odoo, a startup taking on SAP in the realm of project machine, boosted its valuation to 5 billion euros ($5.3 billion) in a secondary allotment round led by Alphabet‘s venture fund and Sequoia Capital.

The Belgium-based company develops delivery-source project helpful resource planning machine, with over 80 capabilities available on its platform offering agencies tools for accounting, buyer relationship management, human sources and e-commerce and web space constructing.

Fabien Pinckaers, CEO and co-founder of Odoo, told CNBC in an interview this week that his company did now not bear a must rob any main capital because it’s “cash a hit” and rising income at a price of fifty% yr-over-yr. Endeavor helpful resource planning, he said, is “composed an extraordinarily fragmented market.”

“The reason each person [has] failed [in this market] is that or no longer it’s rather advanced,” Pinckaers told CNBC. “Dinky corporations bear advanced wants from accounting to stock, to web space, e-commerce, level-of-sale. It is loads and they also haven’t got finances, and they also need something that is easy and cheap.”

“No person succeeded to salvage every,” he added. “You bear advanced merchandise treasure SAP that urge successfully for enormous corporations. However or no longer it’s advanced and costly.”

Andrew Reed, partner at Sequoia Capital, added that the market Odoo is addressing “fair requires more gestation time than most startups every for the reason that core plan is extremely advanced, and making it easy to utilize for small agencies and varied worldwide locations isn’t very any small feat.”

Humble beginnings

Odoo “isn’t very any longer your passe Silicon Valley tech fable,” based on Reed.

Pinckaers opened the company’s first-ever space of enterprise 22 years ago on a farm in Belgium. That became all he can also afford on the time. Later, as the company started bringing in income, Odoo opened two additional places of work in Belgium, dwelling to the firm’s be taught and pattern, enhance and technical groups.

This day, Pinckaers resides in India with his family. He’s lived there for a yr now, working to originate larger the company’s presence there, hiring more folks, increasing advertising and broadening Odoo’s general partner network.

Odoo had billings of 370 million euros final yr and is heading in the exact direction to top 650 million of billings in 2025 — after that, the company is hoping to top the 1 billion-euro billings milestone by 2027. Billings — or the full sum of all invoices for a given yr — is Odoo’s preferred metric for monitoring annual income performance.

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Around 80% of Odoo’s enterprise currently accounts for delivery-source machine, with the final 20% coming from machine licensed for a rate, Pinckaers said. Birth source refers to a form of machine that allows users to salvage admission to the underlying code — most normally free of brand — which they will then regulate and alter.

In no urge to IPO

Despite Odoo now being on the scale of an IPO-ready enterprise, Pinckaers said he is in no urge to rob the company public. If the leisure, final deepest has given Odoo flexibility to care for centered on investing for the prolonged term, he said.

Odoo’s deepest backers are no longer in a urge for the firm to head public, either. Alex Nichols, partner at Alphabet’s CapitalG, told CNBC that he isn’t very any longer worried about “IPO timing,” adding that components treasure public market prerequisites are in a roundabout intention “out of our adjust.”

Pinckaers constructed the enterprise to the dimensions it’s currently primarily by bootstrapping — that is, rising with out raising external funding. Odoo hasn’t had to rob main capital from merchants in a decade, opting as a change to let early merchants and workers sell shares in secondary sales.

The final time Odoo secured main funding became in 2014, when it raised $10 million in a Series B round. Earlier than the latest secondary round, Odoo became most lately valued by merchants at 3.2 billion euros.

Odoo’s other backers embody the likes of personal equity companies Summit Partners, Noshaq, and Wallonie Entreprendre, which all sold a part of their shares to CapitalG and Sequoia as segment of the five hundred-million-euro funding announced on Wednesday.

Even after selling a part of its shares, Summit stays Odoo’s most titillating institutional shareholder. Pinckaers himself has by no intention sold his absorb deepest shares.

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