Performance driven
Cyril Bertrand, Managing Partner

Odoo – the true meaning of Ambition

  In 2014, we invested €3 million in OpenERP, which was previously, very aptly called “TinyERP”. I vividly remember its Founder & CEO, Fabien Pinckaers saying (and writing) that he was going to take on SAP and Netsuite (now Oracle). He had less than 50 employees.    He quickly renamed his company Odoo “because the number of o’s in startup names is correlated with success”. So he packed as many o’s he could in a four-letter name but raised no further financing. Now properly equipped, Odoo became the worldwide largest ERP in number of installs and a profitable > €100M Saas business.   Today, the company announces that it has raised €180 million with our brilliant colleagues Han & Antony of Summit Partners. It is time for XAnge to say farewell and let Fabien, his CFO Alessandro and their 2000 employees bring Odoo to the next level. Time to say thank you, because Odoo returns more than the full amount of the fund investment.   For XAnge, this is our 3rd unicorn in just a month.

A story that epitomizes the role of early stage VCs.

With the consent of Fabien, CEO & Founder of Odoo, let me copy here a recent email exchange, because it perfectly sums up the role of early stage VCs like XAnge:


  • Risk: early stage investing is a matter of convictions (and loss of sleep). European VCs work today in an efficient market in the sense that risk is now priced in the performance. Average risk level means average performance. Increase the level of risk and you get increased performance? Not so simple, there are good and bad risks. As professional investors, we are paid to point the flows of money towards good (and massive) risks, which needs to be interpreted independently of the outcome. A good risk may end up with a bad financial outcome, but it was still a good risk. A bad risk may end up with a profit, but it was still a bad risk. Let’s take a few examples to make it clear: at XAnge, risk of competition is a good one and Odoo is a fantastic illustration. Risk of regulation can be a good one (Ledger, Kapten/ChauffeurPrivé). Even the risk of business model can be acceptable (Lydia). But the risk of market appetite (or lack thereof) is a pretty bad one. And the worst of all is the risk of wrong management.
  • Speed: I like so much the second sentence of Fabien: of course a company like Odoo can succeed without VC money. Our money is best used when the purpose is to go faster, much faster. This speed of execution brings no comfort and no luxury – quite the opposite. Driving at VC speed means entrepreneurs break things. A few years back, Fabien had to spend 2 years of his life (and of his family) in Silicon Valley to put Odoo’s US business back on track, after we made a couple of wrong hiring decisions. Today Odoo makes a quarter of its revenues in the US with 300 employees.
  • Support: XAnge stays on average 8 years on board of its startups and this figure must be more or less similar for our VC colleagues around the world. That’s the longest of any investment asset class and Odoo was no exception. It took Odoo 5 years to get to first VC funding and then another 10 years to become an unstoppable success. Their magic wand? They grew consistently at 50-60% every single year, which after 10 years adds up to a pretty big number.


Software now works for the real economy

Odoo is celebrating its unicorn status, so let’s talk a bit about software valuations. Crazy or reasonable?

  • Money is chasing high-quality assets. This is the result of a rather rational behaviour of economic actors: if they have to put the money somewhere, then they choose the most protected assets, the top of the range.
  • In this context, is there an investment family that is better positioned than SaaS over the next few years? Saas players are building the new “nervous system” of virtually every industry – controlling the flow of information, decision making, and building the tools of decision centres.
  • Furthermore, the sources of funding for Saas are also increasing in number, diversity and quality, because the Saas model boasts a strong component of predictability – so new sources of (non/less dilutive) capital are looking at this asset class.

At XAnge we believe that current software valuations are rational, given the monetary context. So we’ll keep doing investments like Odoo, investments that support the real economy: Odoo allows factories, retailers, pharmacies, sports clubs, restaurant chains and so many “physical businesses” to run their operations smoothly. Odoo takes a stance to be the most affordable of all ERPs not just so that all SMEs and SMIs can have access to it, but because they believe something as essential as a business management tool need not cost an arm and a leg.

Odoo is a big business now. We at XAnge are early stage folks so to celebrate ERP software in general and belgian ERPs in particular, we contributed a few weeks ago to the birth of a baby Odoo! Vertuoza is an ERP for construction companies. Life goes on.

Startup culture is a way to operate

We take away a huge lesson: doing things like others means you get average results. Doing things like no one else is a daily challenge but an off-the-chart reward opportunity.

At Odoo, this means : 

  • Prioritizing the hiring of profiles with outstanding strengths. Nice and easy? Not exactly, because that means embracing their equally strong weaknesses;
  • Creating a horizontal organisation of 2000 people, which looks almost like an Odoo-specific implementation of Holacracy;
  • Running a fully decentralized operation, which means empowering employees by giving them projects & responsibilities that are a little above their competence;
  • Using their own software (Odoo runs Odoo), even when – many years ago – Odoo was not fully developed and generated nightmares for board reports
  • Practicing transparency and make the salaries of the whole organisation publicly accessible
  • Empowering employees to choose their benefits inside a given budget according to their needs/age (company car, insurances, sport clubs subscription .. or cash) 


So a massive thank you to Odoo for the outsize financial return. But above all, thank you for the learning opportunity. XAnge will now disseminate these key learnings across the full range of the XAnge family!

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