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

Odoo, a startup taking connected SAP successful the realm of endeavor software, boosted its valuation to 5 cardinal euros ($5.3 billion) successful a secondary stock circular led by Alphabet's task money and Sequoia Capital.

The Belgium-based institution develops open-source endeavor assets readying software, with implicit 80 applications disposable connected its level offering businesses tools for accounting, lawsuit narration management, quality resources and e-commerce and website building.

Fabien Pinckaers, CEO and co-founder of Odoo, told CNBC successful an interrogation this week that his institution didn't person a request to rise immoderate superior superior arsenic it is "cash profitable" and increasing gross astatine a complaint of 50% year-over-year. Enterprise assets planning, helium said, is "still a precise fragmented market."

"The crushed everybody [has] failed [in this market] is that it's rather complex," Pinckaers told CNBC. "Small companies person analyzable needs from accounting to inventory, to website, e-commerce, point-of-sale. It's a batch and they don't person budget, and they request thing that is elemental and affordable."

"Nobody succeeded to get both," helium added. "You person analyzable products similar SAP that tally good for ample companies. But it's analyzable and expensive."

Odoo "is not your accepted Silicon Valley tech story," according to Reed.

Pinckaers opened the company's first-ever bureau 22 years agone connected a workplace successful Belgium. That was each helium could spend astatine the time. Later, arsenic the institution started bringing successful revenue, Odoo opened 2 further offices successful Belgium, location to the firm's probe and development, enactment and method teams.

Today, Pinckaers resides successful India with his family. He's lived determination for a twelvemonth now, moving to grow the company's beingness there, hiring much people, expanding selling and broadening Odoo's wide spouse network.

Odoo had billings of 370 cardinal euros past twelvemonth and is connected way to apical 650 cardinal of billings successful 2025 — aft that, the institution is hoping to apical the 1 billion-euro billings milestone by 2027. Billings — oregon the full sum of each invoices for a fixed twelvemonth — is Odoo's preferred metric for tracking yearly gross performance.

Despite Odoo present being astatine the standard of an IPO-ready business, Pinckaers said he's successful nary unreserved to instrumentality the institution public. If anything, remaining backstage has fixed Odoo flexibility to enactment focused connected investing for the agelong term, helium said.

Odoo's backstage backers aren't successful a unreserved for the steadfast to spell public, either. Alex Nichols, spouse astatine Alphabet's CapitalG, told CNBC that he's not disquieted astir "IPO timing," adding that factors similar nationalist marketplace conditions are yet "out of our control."

Pinckaers built the concern to the size it is contiguous chiefly by bootstrapping — that is, increasing without raising outer funding. Odoo hasn't had to rise superior superior from investors successful a decade, opting alternatively to fto aboriginal investors and employees merchantability shares successful secondary sales.

The past clip Odoo secured superior backing was successful 2014, erstwhile it raised $10 cardinal successful a Series B round. Prior to the latest secondary round, Odoo was astir precocious valued by investors astatine 3.2 cardinal euros.

Odoo's different backers see the likes of backstage equity firms Summit Partners, Noshaq, and Wallonie Entreprendre, which each sold a information of their shares to CapitalG and Sequoia arsenic portion of the 500-million-euro concern announced connected Wednesday.

Even aft selling a information of its shares, Summit remains Odoo's largest organization shareholder. Pinckaers himself has ne'er sold his ain idiosyncratic shares.