Open source is now a dominant force in the IT world. Today, a startup that developed business management software on open source is announcing a substantial secondary investment to support that growth.Odoo, a Belgia-based provider open-source-based software for business, has been awarded $215 million by Summit Partners. It includes ERP and inventory management, as well as CRM and human resources software. Marketing tools are also available.Summit is making a secondary investment. This means Summit is buying shares of existing investors (specifically Sofinnova Partners & XAnge). Odoo has been profitable for many years, CEO and founder Fabien pinckaers stated in an interview. It didn't have to raise additional cash by giving away more equity. This investment is worth more than 2 billion, or $2.3 billion at current rates. Odoo will be the first unicorn to emerge from Wallonia, which is the Belgian region where it is located.This is a sign that the tech world has begun to decentralize beyond The Valley.Summit, one of Odoos early (equity) backers has now bought secondary shares for the second time. The firm made a similar $90 million investment in 2019.Odoo has 7 million users and is a prime example how economies of scale can be used to benefit from the most successful open-source projects. But, it also does so with a twist.Odoo offers an open-source and free version of its services, which Pinckaers stated contains approximately 80% of the features. The company also offers a proprietary, paid version with 20% more features.He said that 90% of Odoos customers use the free tier and 10% choose the proprietary paid tier. With 7 million users, that's enough to make the business profitable enough to continue investing in growth and not give away any equity.This is not all. What is notable is the way Odoo presents itself. Although open source software has long been viewed as the domain of developers, and other technical professionals, Odoo is unique in that it creates software that is aimed at employees.Pinckaers stated that we are the only open source project created for non-technical users.It targets users via both its SaaS platform and via a large channel partner operation, where channel partners will host services. He said that Odoo's free nature makes it a strong partner choice, not only because it is a stark contrast to other SAPs, Microsofts, and Oracles around the world but also because it is easier to sell than paid services. He said that there are almost 4,000 partners and 90,000 community members contributing software to the Odoo platform.The company has seen a 50% increase in revenues and customers over the last 10 year (and 63% over 15 years). It has been around since 2005 and has 1,700 employees. Plans to add 1,000 more this year. In 2021, the company's billings will reach 160 million. Pinckaers stated that Odoo's next steps will be to expand the software it offers to its users through its platform. He said that the company is currently focusing on e-commerce as well as website development. These are two areas that he believes could be helped by open-source tools that are more user-friendly and less technical.Han Sikkens (MD and head of Europe, Summit Partners) said in a statement that they are delighted to support Odoo's next phase of growth. We believe that the future is bright and Odoo has the potential disrupt the market dominated by software giants such as Oracle, MS Dynamics, and SAP. Sikkens will join the board.
