Software firm Odo was valued at $5.3 billion in a secondary share sale.

Fabien Pinckaers, CEO of Belgium-based enterprise software startup Odoo.

Odo

Odo, a startup is taking off. SAP In the enterprise software sphere, a secondary share round raised its value to 5 billion euros ($5.3 billion). Alphabet’s Venture Fund and Sequoia Capital.

The Belgium-based company develops open-source enterprise resource planning software, with more than 80 applications available on its platform that offer business tools for accounting, customer relationship management, human resources and e-commerce and website development. are

Fabien Pinckaers, Odoo’s CEO and co-founder, told CNBC in an interview this week that his company doesn’t need to raise any seed capital because it is “cash-efficient” and generates revenue at a 50% annual rate. is growing Year-over-year enterprise resource planning, he said, “is still a very fragmented market.”

“All reason [has] failed [in this market] Pinkers told CNBC that it’s quite complicated. “Small companies have complex needs, from accounting to inventory, website, e-commerce, point of sale. It’s overwhelming and they don’t have the budget, and they need something that’s simple and affordable. “

“No one has managed to achieve both,” he added. “You have complex products like SAP that work well for large companies. But it’s complex and expensive.”

Andrew Reed, a partner at Sequoia Capital, added that Odoo’s focus on the market “just takes more time than most startups both because the underlying system is so complex, and it has to be scaled up for small businesses and different countries.” Making it easy to use is no small feat.”

Humble beginnings

Odo is “not your traditional Silicon Valley tech story,” according to Reed.

Pinkers opened the company’s first office on a farm in Belgium 22 years ago. That was all he could bear at the moment. Later, as the company began to generate revenue, Odoo opened two additional offices in Belgium, which is home to the firm’s research and development, support and technical teams.

Today, Pinkars lives in India with his family. He’s been there for a year now, working to expand the company’s presence there, hiring more people, expanding marketing and expanding Odoo’s overall partner network.

Odoo had billings of 370 million euros last year and is on track to top 650 million billings in 2025 – after that, the company hopes to top the 1 billion-euro billing milestone by 2027. . Billings—or the total sum of all invoices for a given year—is Odoo’s preferred metric for tracking annual revenue performance.

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About 80% of Odoo’s business today is from open source software, with the remaining 20% coming from software licensed for a fee, Pinkers said. Open source refers to a type of software that allows users access to the underlying code—often for free—which they can then modify and adjust.

In a rush for an IPO

Despite Odo now being the scale of an IPO-ready business, Pinkers said he’s in no rush to take the company public. If anything, remaining private has given Oddo the flexibility to focus on long-term investments, he said.

Odo’s private backers are also in no rush to take the firm public. Alex Nichols, a partner at Alphabet’s CapitalG, told CNBC that he is not concerned about “IPO timing,” adding that factors such as public market conditions are ultimately “out of our control.”

Pinkerz built the business to the size it is today primarily by bootstrapping — that is, growing without raising external funds. Odo hasn’t had to raise seed capital from investors in a decade, opting instead to sell shares in a secondary sale to early investors and employees.

Odoo last received primary funding in 2014, when it raised $10 million in a Series B round. Before the latest secondary round, Odoo was recently valued at 3.2 billion euros by investors.

Odoo’s other backers include the likes of private equity firms Summit Partners, Noshaq, and Wallonie Entreprendre, which sold part of its stake to CapitalG and Sequoia as part of a €500 million investment announced Wednesday.

Even after selling a portion of its shares, Summit remains Odoo’s largest institutional shareholder. The Pinkers themselves have never sold their personal shares.