I am pleased that Odoo has a bright future simply because I work with Odoo’s great business software. So when Fabien Pinckaers, the Founder, announced that Summit Partners made a €180 million investment in Odoo I was very happy, this is over 2 billion euros evaluation.
With 7 million users on its platform, Odoo is a prime example of the strong payoffs to be had from economies of scale in the most successful open-source projects, but it’s also doing so with a twist.
On the open-source front, Odoo provides a version of its services that is “open source” and free, which Pinckaers said contains about 80% of all of its features. It then offers a paid, proprietary version of the product with the remaining 20% of the features.
About 90% of Odoo’s customer base takes the free tier, he said, with only 10% taking the paid, proprietary tier. But with 7 million users, that is enough to run the business at a profit big enough that it can continue investing in growth without giving away more equity.
What is also notable is how Odoo pitches itself. While a lot of open-sources have been seen as the domain of developers and others in the technical community, Odoo designs software on its platform that is aimed at others in the workplace, not engineers.
“We are one of the only exceptions of open-source built for non-technical users,” Pinckaers said.
It targets users both directly via its SaaS platform and via an extensive channel partner operation, where channel partners will host the services themselves. Its traction with these partners is strong, he added, because of the free nature of Odoo (which is not only a contrast to the SAPs, Microsofts, and Oracles of the world but at times a much easier sell around which a channel partner can provide other paid services). There are nearly 4,000 partners now, he added, with another 90,000 individual community members contributing software on the Odoo platform.
The company has been growing revenues and customers at a rate of 50% over the last 10 years (and 63% over the past 15 — it’s been around since 2005), and it now has 1,700 employees with plans to add another 1,000 this year. Billings are expected to be €160 million in 2021. Pinckaers said that Odoo’s next steps will be to continue growing the software that it provides to users on its platform. Specifically, it is focusing on e-commerce and website development, he said, two areas that he feels could benefit from more non-technical, user-friendly open-source tools.
“We are thrilled to support the Odoo team for this next phase of growth,” Han Sikkens, managing director and head of Europe at Summit Partners, said in a statement. “We believe the future is bright, and Odoo has the potential to disrupt the market led by software giants like SAP, MS Dynamics, and Oracle.” Sikkens is joining the board with this round.