Belgium-based open-source enterprise resource planning (ERP) software company Odoo has announced a significant €500 million secondary capital transaction, led by prominent investors CapitalG and Sequoia Capital.
This transaction has increased the company’s valuation to €5 billion, highlighting its position as a global leader in integrated business software for small and mid-sized businesses (SMBs).
Additional participants in the deal include BlackRock, Mubadala Investment Company, HarbourVest Partners, AVP, and Alkeon, with Summit Partners, Noshaq, and Wallonie Entreprendre selling portions of their shares. Summit Partners, however, will remain Odoo’s largest institutional shareholder.
This move reflects confidence in Odoo’s growth trajectory, with Alex Nichols, partner at CapitalG, commenting on the company’s unique approach to software innovation. “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,” Nichols said, emphasising Odoo’s broad global impact across more than 100 countries and numerous industries.
Back in 2021, Odoo secured a $215 million investment from growth equity firm Summit Partners. For those unfamiliar, Odoo also holds the distinction of being the first unicorn to emerge from Wallonia, a region in Belgium.
Belgium’s tech sector has quickly become one of Europe’s most innovative industries, driven by a strong wave of digitalisation. In just the first half of 2024, Belgian tech companies have made impressive strides, raising over €500 million in investments—a notable jump from the €424 million secured in all of 2023, according to reports from Syndicate One, Bain & Company, and Sofina. Just last month, we published an analytical piece exploring whether Belgian tech startups can catch up with their European neighbours—and whether diversity is the missing puzzle piece.
Odoo’s story!
Founded in April 2002 by Fabien Pinckaers, Odoo has grown into a formidable force in the SMB software ecosystem. With a focus on providing a unified, intuitive suite of applications, Odoo now boasts over 13 million users globally and attracts more than 7,000 new clients each month.
The company’s software offers businesses the ability to streamline operations, optimise processes, and scale efficiently. Odoo’s comprehensive platform supports functions ranging from inventory management and accounting to e-commerce and marketing, catering to businesses of all sizes—from startups to established enterprises.
The recent launch of Odoo 18, introduced on October 2, 2024, marks another milestone. This latest version enhances customer experience and strengthens Odoo’s competitive edge in the enterprise resource planning (ERP) space.
Speaking about the platform’s impact, Pinckaers noted, “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.”
How is the company’s growth projectile
Odoo’s financial performance has been consistently strong, with an annual growth rate of 40%. The company is projected to exceed €650 million in billings within the next 12 months and has set an ambitious target of reaching €1 billion in billings by 2027. These figures highlight Odoo’s ability to scale effectively while maintaining profitability.
To support its expansion, Odoo has established 15 subsidiaries and a robust network of 7,500 partners worldwide. This global presence ensures the company remains competitive in an evolving market, enabling it to serve a diverse clientele spanning over 100 countries.
Andrew Reed, a partner at Sequoia Capital, acknowledged Odoo’s potential to transform the SMB software market, stating, “Odoo has built an outstanding software company with a unique culture, product suite, and ecosystem. It feels like their best days are still ahead.”
The €500 million transaction is the latest in a series of investments that have solidified Odoo’s reputation among global investors. Previous funding rounds led by Summit Partners in 2019, 2021, and 2022 paved the way for this significant deal, further cementing Odoo’s appeal.
This latest funding round not only underscores investor confidence but also positions Odoo to accelerate innovation through enhanced research and development. According to Pinckaers, the company is already planning further expansion projects for 2025, signaling its intent to continue driving innovation in SMB-focused software solutions.
What are the challenges and opportunities in the ERP market
While Odoo’s growth trajectory is impressive, the ERP market remains competitive and challenging. Traditional ERP systems have often been criticised for their high costs and complexity, leaving many SMBs underserved. Odoo’s cloud-based, modular platform offers a compelling alternative, enabling businesses to adopt only the features they need while scaling up as required.
However, competition from established players like SAP and Oracle, as well as newer entrants targeting SMBs, poses ongoing challenges. To maintain its edge, Odoo must balance rapid growth with consistent product quality and customer satisfaction.
What do we think about the unicorn startup
Odoo’s €500 million investment and €5 billion valuation mark a significant milestone for the company, reflecting its robust growth and influence in the SMB software market. With its focus on innovation, scalability, and customer-centric design, Odoo has positioned itself as a transformative force in the ERP space.
The company’s commitment to research and development, combined with a strong global presence, ensures it remains at the forefront of an evolving industry. While challenges lie ahead, Odoo’s ability to adapt and innovate will be critical to sustaining its momentum. As 2025 approaches, the company is well-equipped to explore new opportunities and expand its impact, solidifying its role as a leader in integrated business software for SMBs.
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