#82 Odoo Hits €5 Billion Valuation After €500 Million Transaction

Odoo Has Announced That After Transaction of?€500 Million Leaves The Platform With A Valuation of Over?€5 Billion, But Where Does This Leave Customers, Users & Odooers?

Thanks for tuning in! If you like the article, please give it a share, like and subscribe as it massively helps us in building awareness and creating more content. It's all about Odoo education and that helps building towards our goal at DTPJ. :) ??        

Morning Purple Juicers, and so in typical Odoo fashion, I arrive back in the UK, and some huge breaking news drops. While I am jet-lagged, and still?reflecting on the brilliant AUS Odoo ecosystem, it's great to see us riding out the year with even more huge wider ecosystem news.

So thanks, Odoo, for keeping me up writing at midnight, but it's a fantastic topic to talk about and the wider scope of what this means for the ecosystem, so I can be too mad...

Odoo (Odoo S.A.) yesterday announced on all public channels, including CEO, Fabien Pinckaers , that the Belgian Unicorn, leading the charge in battling huge platforms such as SAP , 甲骨文 and others, has completed a transaction worth?€500 Million. The company continues to grow after over 20 years deciding that open-source would be the best way to tackle the bigger boys in the ERP world at the time. Now, over two decades later, according to TechCrunch, that €500 Million sits around $527 Million in exchange rates.

Yes, before you ask, this is a pretty big deal, but I will explain why in a little more detail later.

The transaction was led by CapitalG and Sequoia Capital , and other companies such as BlackRock , Mubadala , HarbourVest Partners , AVP and Alkeon Capital also participated in the transaction.

It's really interesting to see the likes of CapitalG, getting involved, famous for building other enterprises and investing across the likes of Stripe, Airbnb, CrowdStrike and more.?More interestingly, CapitalG, formerly known as?'Google Capital',?is the independent growth fund under Alphabet Inc, founded in 2013, focusing on larger growth tech companies; however, invests more for profits rather than strategically for Google.

Likewise, Sequoia Capital, they brings extreme value to the companies it has helped grow, including the likes of Nvidia, Reddit, YouTube, Apple, Dropbox, DoorDash, PayPal, SpaceX, WhatsApp, and Instagram... I could continue on even. So yes, they have a little bit of experience, you could say.

In addition to this, the secondary capital transaction reflects some super strong messages to the wider company's vision and future impact across the market. As part of the much larger transaction, existing investors, which we have discussed before, such as Summit Partners , Noshaq and Wallonie Entreprendre , will be selling a portion of their shares, with Summit still retaining the largest stake as an institutional shareholder.

It's also important to mention that J.P. 摩根 SE acted as the exclusive placement agent regarding the transaction.

With this news landing, it means that...

'Odoo's valuation now sits above?€5 Billion. Yikes, pretty big.'

Not doing too bad for a system that is often seen as that 'cheaper alternative' to SAP as an example, and that is all it ever will be. We have all seen those forum posts on Reddit...

If you are a regular reader and community member of?Drinking The Purple Juice (DTPJ), then welcome back. With thousands of you tuning in each week, we are growing a fantastic community. If you are new here and it is the first time you are tuning in, then welcome aboard. DTPJ is the channel of choice being, the?Odoo Community Channel, keeping you informed and updated about the?current tips,?news?and?announcements?all regarding Odoo.???

It's time to drink the purple juice!???

This Edition's Ingredients

Let's take a look at this article's ripe ingredients to see what's coming up.

• ?? Investment For The Long-Term
• ?? How Will This Affect Odooers?

So without, delaying the breaking news any further, what does this mean for us Odooers?

On the topic of growth, if you missed my last article, discussing the 1-year anniversary of Odoo Indonesia, then it's a fantastic one to take a look back at once you are done here. With the key growth of Odoo APAC, the unicorn is going from strength to strength.

Investment In Odoo For The Long-Term

The move positions Odoo to grow even more effectively in the long term. We have seen that this year with key partnerships like 德勤 in the last few months and KPMG Belgium in the past. Things seem to be moving up quickly and with momentum/purpose. Here is what many of the stakeholders and Partners had to say about the recent transaction by Odoo S.A. showcased, and what this means for Odoo's future...

Alex Nichols , Partner at CapitalG, had to say this regarding the transaction:

"Fabien and his team have built a one-of-a-kind business from their ambitious vision for a unified suite of tightly integrated business apps. Odoo's powerful and easy-to-use suite of apps has won over customers across more than 100 countries and virtually every industry, as well as companies any where from one to thousands of employees. The team's two decades of dedication and long-term thinking has fostered a robust community of partners, contributors, and users that will serve as their foundation for years to come. We are thrilled to partner with Fabien and the rest of Odoo's leadership team."

From Odoo's reports/findings - the company has sustained once again key annual growth of 40% and is proceeding to hit figures of up to?€650 million in billings alone within the next 12 months aiming to reach a further?€1 billion in billings by 2027. With now over 7,500 global channel partners worldwide, it's onwards and upwards for the unicorn.

Andrew Reed , Partner at Sequoia Capital, further had this to say:

"Odoo has built an outstanding software company with a unique culture, product suite and ecosystem. Odoo is a tremendous business already, and it feels like their best days are still ahead. Odoo has the long-term potential to transform the SMB sowftare market and deliver enormous value to customers. We're excited to partner with Fabien and the Odoo team for the long-term."

This week, we have also seen?Odoo 18?being migrated internally at Odoo, with the scripts and pathways to migrate only weeks ahead of the other side of the year. Arriving with further key improvements to the system for both existing and new customers.

Fabien Pinckaers , Founder and CEO of Odoo, discussed his perspective:

"ERPs are traditionally expensive and resource-intensive to implement, often failing to meet the actual needs and evolving requirements of SMEs. We have developed a unique value proposition that is playing a pivotal role in the market."

It's clear to see that the trust of Investors all the way back to 2019, 2021 and 2022, which was led by Summit Partners, has been a catalyst in Odoo's growth, but also with the latest transaction further highlights that this still could be the very start of the investment wave and we are only seeing the beginning, even after 22 years of existing as international eyes are upon us. Let's see what 2025 brings with further talks, I am sure that are already underway, knowing the way Odoo operates - they will not be taking their foot off the gas or pedal.

Alessandro Mazzocchetti , CFO at Odoo talks more on the cash flow of Odoo:

"I'm confident that Odoo will remain profitable in terms of EBITDA and cash flow as we expand our team and global reach. We will keep working hard to serve our customers and partners!"

Faris Sohail Al Mazrui , Head of Growth at Mubadala, further discusses the innovation of Odoo:

"Odoo stands out as a prime example of innovation in global software, offering scalable, adaptable solutions that empower businesses in the Digital and Cloud Transformation journey. With Mubdala's expertise in software investments and the UAE's role as a fast-growing tech hub, we see Odoo as an execptional partner for companies adapting to cloud and AI megatrends. We're excited to support their growth worldwide."

The Managing Director at Summit Partners, Antony Clavel , closely linked to Odoo, had?this to say about the back of their continued support and investment into the Belgian Unicorn:

"Odoo continues to deliver solutions that we beileve are helping to transform the business software landscape - and they are doing so with impressive traction. We are delighted to welcome new investors and look forward to working together to support Odoo's exciting growth trajectory."

CEO of Wallonie Entreprendre, Olivier Vanderijst , talks about Odoo's valuation:

"The visonary and strategic nature of Odoo's management and the rigor with which it has implemented this vision have led to an incredible valuation of 5 Billion euros, which has attracted the best investors in the world. This is why WE signed this transaction, while remaining a shareholder in the company to support its future growth as a local player."

Lastly, well-known Odooers and COO of Odoo, Sébastien Bruyr , gives his account on the future growth of Odoo in the new years to come:

"We are expecting to open five new subsidiaries within the next three years across Europe, Latin America and Asia-Pacific."

I'd likewise like to highlight the brilliant article by CNBC Journalist Ryan Browne as I thought his take on the news was really interesting getting further insight into Odoo CEO Fabien Pinckaer's mind regarding the transaction. which you can read in the article linked below, including some additional further quotes...

Ryan talks further about the 'In no rush to IPO' status and that while now Odoo is at the size and scale of a ready-positioned IPO-ready business, Fabien is in no rush to take the company public. If anything it has given Odoo the further scope and flexibility to continue on in the way they have been operating for so long.?

What Does The Transaction Mean For The Typical User, Community Member or Odooer Regarding The Wider Scheme Across The Odoo Ecosystem?

Well, for a start, it sends an extremely strong message to both the Odoo Community and other competitor platforms that Odoo is here for the long haul and is not going anywhere.

The major transaction highlights that Odoo's position within the ERP market is extremely strong and is only growing on a trajectory upwards! While also mentioning the continued desire to make Odoo awareness and footprint grow even further and provide accessible solutions to companies of all sizes across the globe.

As described in the press release by Odoo:

If you want to look back at some of those figures, you can do so here in edition #49 of Drinking The Purple Juice, as I dived into the key updates and more:

It's pretty safe to say that since the company was founded in 2002, having recently achieved its 22nd Birthday, the core values have always remained the same regarding supporting businesses. We have clearly seen this with the focus being put previously on open-source software where others had tried and failed. With now over 13+ million users globally and achieving stats like 7,000+ new customers each month, the growth continues to rise. Scaling operations effectively but, while doing so, not seeing a reduction in driving innovation and business processes.

Given that Odoo has not needed to raise capital during nearly the last decade due to healthy cash flow and consistent growth, we can assume that, as Odooers, everything is running smoothly from a financial side, given that the last round of valuation prior to this one was set at?€3.2 billion, and the?last funding round back in 2014 brought in?€10 million Series B round. But with the cash raised now, we can only assume that this will further be put into R&D (Research and Development) to further push the capabilities of the product along. I would be surprised if AI, does not play a huge role in this as well, with the baselines having been implemented in Odoo?17 and?Odoo?18 accordingly.

From my perspective on it, it's only positive. As Odooers, we can't not see this as a positive. It showcases Odoo's willingness to keep growing further as an organisation and wanting to be better to challenge the bigger players in the ERP world. With likes of Partnerships with Deloitte also being confirmed in the last couple of months, things seem to be moving quickly.

Let's See What 2025, Beholds As I Can Assure You That Odoo Never Waits Around Too Long to Make The Next Big Move...

As our community grows, here at?Drinking The Purple Juice, I just wanted to say thank you again for tuning into another article.?I'll continue reporting on all the news, insights, tips, tricks and information on Odoo as an ecosystem. All I ask is that you keep turning up! :)

If you ever fancy having a conversation or want to ask a question, drop me a message!???

Don't forget to share, like and subscribe - it helps us massively! See you soon. :) ??        

Keep up to date with all our latest articles, news and more via DTPJ:?Take me there