Belgium-based Odoo decided to use open-source tools as a way to attack the enterprise resource planning (ERP) software market, going up against giants like SAP. Fast forward a couple of decades and it’s now picking up €500 million in secondary investment — or around $527M at current exchange rates — led by CapitalG (Alphabet’s venture fund) and Sequoia Capital plus other investors.
The new funding sees its valuation rising to €5 billion ($5.26B). Yes, you read that right.
Odoo hasn’t needed to raise primary capital in eight years, because with over five million users and 40% growth per year, business is very good indeed. It’s projected to exceed €650M ($685M) in billings in the next 12 months and is aiming to hit a cool €1B ($1.05B) by 2027. It was previously valued at €3.2B ($3.37B) prior to this round.
So why is Odoo raising a chunk of cash now? The company said the investment will be used to accelerate R&D and product development — likely with its eye on how AI might disrupt ERP business as usual.
As we reported recently, traditional ERP software tools — usually provided by IT systems suppliers — are coming under attack from AI. Cogna is a U.K. startup that raised $15 million to get AI to write enterprise software apps on its own, for example.
Odoo, which was founded back in April 2002, is the brainchild of Fabien Pinckaerson who founded the company from his farm. He now lives in India, steering the business from there.
Pinckaers told CNBC he is in no rush to take the company public, despite its high valuation and revenues.
Pinckaers built Odoo up from humble open source project beginnings to a business software juggernaut that comprises over 80 apps spanning a range of functions such as accounting, CRM, manufacturing and marketing, along with an app store of 50,000+ community developed apps, serving a large community of developers and partners.
The majority of Odoo’s business is in (free-to-access) open-source software, with 20% coming from software licensed for a fee (aka, its paid “Odoo Enterprise” products) for users that want things like extra features.
“Fabien and his team have built a one-of-a-kind business from their ambitious vision for a unified suite of tightly integrated business apps,” said Alex Nichols, partner at CapitalG, said in a canned statement accompanying the funding.
Writing on his company’s blog, Pinckaers added: “ERPs are traditionally expensive and resource-intensive to implement, often failing to meet the actual needs and evolving requirements of SMEs. We have developed a unique value proposition that is playing a pivotal role in the market.”
Odoo last raised funding back in 2014, when it pulled in a $10M Series B round.
Also participating in this rare new round are Alkeon, AVP, BlackRock, HarbourVest Partners, and Mubadala Investment Company.
Previous investors include Noshaq, Summit Partners, and Wallonie Entreprendre, which all sold secondary shares to CapitalG and Sequoia as part of this round. Summit will remain Odoo’s largest institutional shareholder.