Odoo, a startup challenging SAP in the enterprise software space, has raised its valuation to 5 billion euros ($5.3 billion) through a secondary share round, led by Alphabet’s venture fund and Sequoia Capital.
Based in Belgium, Odoo specializes in open-source enterprise resource planning (ERP) software, offering over 80 applications on its platform. These tools help businesses manage accounting, customer relationship management, human resources, e-commerce, and website development.
In a recent interview with CNBC, Fabien Pinckaers, CEO and co-founder of Odoo, stated that the company had no need for primary capital as it is “cash profitable” and experiencing a 50% year-over-year revenue growth. He also highlighted that the ERP market remains “very fragmented.”
“The reason everybody [has] failed [in this market] is that it’s quite complex,” Pinckaers told CNBC. “Small companies have complex needs from accounting to inventory to website, e-commerce, point-of-sale. It’s a lot and they don’t have budget, and they need something simple and affordable.”
“Nobody succeeded to get both,” he added. “You have complex products like SAP that run well for large companies. But it’s complex and expensive.”
Andrew Reed, a partner at Sequoia Capital, noted that the market Odoo is targeting “requires more gestation time than most startups” due to the complexity of its core system and the challenge of making it simple to use across diverse small businesses and countries.
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Humble Beginnings of Odoo
According to Reed, Odoo “is not your traditional Silicon Valley tech story.”
Fabien Pinckaers, Odoo’s CEO and co-founder, started the company 22 years ago with a modest office on a farm in Belgium, the only space he could afford at the time. As revenues grew, the company established two more offices in Belgium, which now house its R&D, support, and technical teams.
Today, Pinckaers lives in India with his family, focusing on expanding Odoo’s presence in the region. Over the past year, he has prioritized hiring, enhancing marketing efforts, and broadening the company’s partner network.
Odoo generated 370 million euros in billings last year and is projected to exceed 650 million euros in 2025, with a goal of surpassing 1 billion euros in billings by 2027. The company tracks performance through billings, the total value of all invoices issued annually.
Currently, about 80% of Odoo’s business comes from open-source software, while the remaining 20% is from paid software licenses. Open-source software allows users to access, modify, and adjust the code, often at no cost.
No Rush to IPO
Despite being at the scale of an IPO-ready business, Pinckaers has no immediate plans to take Odoo public. Staying private, he said, provides the flexibility to focus on long-term investments.
Odoo’s investors share this perspective. Alex Nichols, a partner at Alphabet’s CapitalG, emphasized that IPO timing is not a concern, as public market conditions are beyond their control.
The firm’s growth has largely been driven by bootstrapping, with the company avoiding primary capital raises for the past decade. Instead, early investors and employees have sold shares through secondary sales.
The last primary funding round was in 2014, when Odoo raised $10 million in a Series B. Before the latest secondary share sale, the company was valued at 3.2 billion euros.
As part of a recent 500-million-euro secondary round, private equity firms such as Summit Partners, Noshaq, and Wallonie Entreprendre sold shares to CapitalG and Sequoia. Despite selling some of its stake, Summit remains Odoo’s largest institutional shareholder. Notably, Pinckaers has never sold his shares.
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